January 28th, 2014
06:00 AM ET
8 months ago

Obama to raise minimum wage for federal contractors

(CNN) - While President Barack Obama’s attempts to increase the nation’s minimum wage through legislation have stalled in Congress, the White House announced plans on Tuesday to use the president’s executive powers to partially address the problem.

Just hours before the President is scheduled to deliver his fifth State of the Union address, the White House revealed that Obama will issue an executive order to increase the minimum wage for new federal contract workers.

The action will cover all workers employed under future government contracts, ensuring that none is paid less than $10.10 an hour. In a fact sheet announcing the action, the White House highlighted several occupations that will be helped by the move, including kitchen and laundry workers on military bases, as well as janitors at federal buildings and construction workers at government building sites.

“The President has embraced the idea in the past that he can use his authority as President and the powers available to the President to advance his agenda on behalf of the American people,” White House Press Secretary Jay Carney said at his briefing on Monday. “What we have said is that he views 2014 as a year of action and that he has tasked his team to come up with new ways in which we can - he can - advance that agenda.”

An administration official confirmed the action will only apply to new contracts, and the White House believes contractors will have time to factor the new wage requirements into future bids.

Included in Tuesday’s announcement was a call for Congress to pass an increase in the minimum wage nationwide and an endorsement of a proposal put forward by two senior Democrats, Sen. Tom Harkin of Iowa and Rep. George Miller of California. The proposal would raise the minimum wage for all workers in stages, ultimately reaching $10.10 an hour, while also indexing the wage floor to inflation going forward.

Tuesday morning, House Speaker John Boehner pushed back against the executive action by the President.

"This idea that he's just going to go it alone, I have to remind him we do have a constitution. And the Congress writes the laws, and the President's job is to execute the laws faithfully. And if he tries to ignore this he's going to run into a brick wall," the top Republican in the House told reporters.

"Were just not going to sit here and let the President trample all over us," Boehner added.

The White House says the President has the authority to make the move.

Cecilia Muñoz, director of the White House Domestic Policy Council, said in an interview Tuesday with CNN Senior White House Correspondent Jim Acosta that the President "clearly has the authority" to raise the minimum wage for federal contract workers.

Obama has made wages and economic inequality a central theme of his second term in office, raising the issue repeatedly, including during a call for an extension of emergency unemployment benefits in his first public event of 2014.

“America is getting stronger, and we've made progress,” the President said. “And the economy is growing, and we've got to do more to make sure that all Americans share in that growth. We've got to help our businesses create more jobs. We've got to make sure those jobs offer the wages and benefits that let families rebuild a little security. In other words, we've got to make sure that this recovery leaves nobody behind. And we've got a lot of work to do on that front.”

Two national polls conducted in the past two weeks both indicate widespread support for raising the minimum wage to $10.10 an hour. Seventy-two percent of those questioned in a CBS News survey and 73% of those questioned in a Pew Research Center poll said they favor the move. Both surveys indicated a partisan divide, with around nine in ten Democrats and seven in ten independents in support of raising the minimum wage to $10.10 an hour, and Republicans divided.

CNN's Jim Acosta, Brianna Keilar, Dana Bash and Paul Steinhauser contributed to this report.

soundoff (545 Responses)
  1. Capitalist

    this will cause more damage than good....now everyone making $10 an hour who has worked hard to get there gets screwed and will demand more from their employer...chaos.

    January 28, 2014 10:16 am at 10:16 am |
  2. werewolf1

    Obama: You know ZERO when it comes to the Economy.

    January 28, 2014 10:17 am at 10:17 am |
  3. Cindy

    I as a taxpayer would not of voted for an increase in minimum wage at this time. This will just increase costs for the government at a time when we can barely pay the bills. So what is being cut to pay for the increase as all future contracts will go up to compensate for the increase.

    January 28, 2014 10:17 am at 10:17 am |
  4. Lynda/Minnesota

    "Our leader is clue less, how about a plan to improve the economy and put more people back to work?"

    Yeah. How about you write the CEO's of America demanding more jobs? It is they, not the President, who is holding back job growth.

    I mean, my God, how many golden toilets does a family need anyway?

    January 28, 2014 10:17 am at 10:17 am |
  5. ahab

    Who says racial bias is not still live and well?

    January 28, 2014 10:18 am at 10:18 am |
  6. Malory Archer

    smith

    @Malory- Your logic is flawed. A huge increase in the min. wage will result in hrs. being cut for hourly workers and labor being put on salary folks. Ever heard of profit and labor?

    ++++++++++++++++++++++++++++++++++++

    Yeah, except every time there's been an increase in the minimum wage the exact opposite happens. Employers are going to schedule as many people as they need to get the job done – just as it is now. If you go into a supermarket and have to stand in a 10-deep line because the conservative owner, believing the hype spewed by rightwing radio screaming heads, cut his own throat by sending all the cashiers home so he wouldn't have to pay labor costs and there's only one checkout open. Are you going to stand there for an hour waiting to check out? No, you're going to go to the liberal-owned store where there are enough cashiers to get you through checkout in a timely manner. The liberal-owned store gets more business, increasing their bottom line, and therefore can afford to pay workers a higher wage. The conservative-owned store goes the way of the rotary phone, and the peasants rejoice!

    January 28, 2014 10:18 am at 10:18 am |
  7. patrick

    this president has NEVER had the best interest of this country in mind.....just his agenda and his party.

    January 28, 2014 10:18 am at 10:18 am |
  8. Adam

    Oh good. More policies to drive out people who actually contribute to our economy, but appease the poor. As long as their happy for a year or so, right? How does this help our country and economy? Fail.

    January 28, 2014 10:19 am at 10:19 am |
  9. Thomas Rice

    They call that a dictatorship when a president changes or makes rules or laws unilateraly

    January 28, 2014 10:19 am at 10:19 am |
  10. Rudy NYC

    Matt wrote:

    "... ... I have always slightly agreed that the whole “trickledown economics” idea is absolutely baloney. So raising the minimum wage isn’t a half bad idea. However, supposing the overall minimum wage raises to $10.10 across the country...what are the immediate affects? Employers (the greedy people they are) will react to this by hiring less because they would have to pay more to get the work done. ... ..."
    -------------------------
    Business owners would hire less people? Holding that false belief is just as bad as believing in "trickle down economics," which actually isn't an economic theory at all. The term was first coined by one of Reagan's campaign advisors. Trickle down is built around a whole set of supporting beliefs that are not supported by any facts. You just recited one of them.

    What evidence or proof do you have that employers would hire fewer people? If an employer has the business demand and need to for another job position to be filled, you're saying that he's not going to fill it, much to the detriment of his business. Any business owner who is that stupid deserves to go out of business, and I don't think that anyone smart of enough to start up and operate a business is really that stupid.

    January 28, 2014 10:20 am at 10:20 am |
  11. Lynda/Minnesota

    "Care to back that up with a fact? Or did you get that this morning from Glenn Beck?"

    Isn't Glenn Beck the guy who now admits he helped "divide" the country? Kind of a slap in the face to his fan base, eh? To tell them he can't believe they were stupid enough to believe his nonsense to the point they did. Nothing like telling your viewers that they're a bunch of ... well, you know.

    January 28, 2014 10:20 am at 10:20 am |
  12. Malory Archer

    Tom

    It is really too bad most people do not see that raising the minimum wage only helps the poor for about a year, but erodes the income value for all those middle class people everyone keeps claiming to want to help.

    ++++++++++++++++++++++++++++++++++++++++++++++++

    Actually, a low minimum wage compresses middle-class wages.

    January 28, 2014 10:20 am at 10:20 am |
  13. Malory Archer

    patrick

    this president has NEVER had the best interest of this country in mind.....just his agenda and his party.

    +++++++++++++++++++++++++++++++++++++++++++

    Right on Patrick, because heaven knows, there are NO poor Republicans!

    January 28, 2014 10:22 am at 10:22 am |
  14. blakenaustin

    Am disgusted and disturbed by the repeated constitutional end runs by this president through exective orders. He is a tyrant in the making. Everyone of these executive orders needs to be challenged in the courts. And this president needs to be held accountable for his actions.

    January 28, 2014 10:22 am at 10:22 am |
  15. julnor

    "An administration official confirmed the action will only apply to new contracts, and the White House believes contractors will have time to factor the new wage requirements into future bids." Translation: YOUR costs will go up.

    January 28, 2014 10:22 am at 10:22 am |
  16. saggrl25

    No federal contractors make minimum wage. They get paid three times this amount. what a joke

    January 28, 2014 10:23 am at 10:23 am |
  17. The Truth Hurts

    @rapierpoint

    Wrong! Where did you hear that lie?

    January 28, 2014 10:24 am at 10:24 am |
  18. Rudy NYC

    Garrett from Texas wrote:

    So, first, he has a historic increase in federal employees (don't go citing countering arguments that Bush created more government employees – those weren't created by Bush as they were mostly at the state and local level)
    -------------------------------
    That's complete denial of facts, and pure nonsense. Garret is suggesting that it was the state and local governments that were responsible for the increased the size of the federal government during the Bush years. Conservatives say the darndest things.

    January 28, 2014 10:24 am at 10:24 am |
  19. davecu

    No one employed on federal contracts is paid that low.
    Empty gesture
    Something he WILL accomplish. Maybe.!

    January 28, 2014 10:24 am at 10:24 am |
  20. Jim

    Empty rhetoric from an empty suit. Majority if not all contracts are far above that wage anyway

    January 28, 2014 10:25 am at 10:25 am |
  21. Jack

    Raising the minimum wage hurts the exact group that it is designed to help by causing businesses to cut jobs, particulary entry level jobs.

    January 28, 2014 10:26 am at 10:26 am |
  22. smith

    @rs-Let me break down for you. Salary personnel make the same regardless of how many hrs they work. If a business needs to balance their labor expense they will cut the hourly worker and give his to work to the salary personnel. You know nothing about business or mangement because that`s basic mangement 101.

    January 28, 2014 10:27 am at 10:27 am |
  23. tom l

    @rs
    "A law has to be broken genius. One could make a far better case to send the GOP to Gitmo"
    ====

    A law has to be broken, right? I have noticed you have gotten a little more angry and partisan lately. What gives? Did you happen to see my post from last week? I am hoping we can have some constructive dialogue and learn from each other. Yes, we are all stubborn and want to prove that we're right! How is an employer going to hire more people if his costs for workers have gone up? The owner's demand for their product has not gone up. It remains where it is no matter what the increase is. All that has happened is that the owner's costs have gone up but his income and business has not gone up.

    January 28, 2014 10:27 am at 10:27 am |
  24. The Truth Hurts

    davecu
    No one employed on federal contracts is paid that low.
    Empty gesture
    Something he WILL accomplish. Maybe.!
    ___________________________________

    Stop spreading lies!

    January 28, 2014 10:27 am at 10:27 am |
  25. The Mayor of Medinah

    The dictaor in cheif is at is again

    January 28, 2014 10:27 am at 10:27 am |
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