January 28th, 2014
06:00 AM ET
6 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. duane - st.pete FL

    spend away...its just our tax dollars....we work so you can give it away to the "hard working" goverment employee's....clown

    January 28, 2014 10:28 am at 10:28 am |
  2. Bill Friedline

    $10.10 is still not a living wage and if the contractors like Lockheed can afford to pay their CEO $70,000 per DAY then they can afford to pay workers more without charging more.

    January 28, 2014 10:28 am at 10:28 am |
  3. bibleverse1

    $6000 per worker that works 40 per week. Is just not prudent. Tying the current minimum wage to inflation is what is necessary and lower minimum wage for workers under 18 to 5.00 per hr.

    January 28, 2014 10:29 am at 10:29 am |
  4. Ronnie

    You people are crazy! If they raised the minimum wage for everyone to $15 per hour , people would make more money ... Then they would spend more money... Then that would create jobs because it would increase production on items and more workers will be needed to make more things!

    But oh no , keep allowing them to pay u nothing for working all day while Israel gets up to 15 billion a year in welfare for free!

    January 28, 2014 10:29 am at 10:29 am |
  5. Gator

    The big fed contractors like Booz and SAIC charge the government WAY more than $10/hr.

    Contracting is the biggest scam going.

    January 28, 2014 10:30 am at 10:30 am |
  6. columbus

    It seems we are conceding to a future of low wage, low skill jobs, rather than trying to energize a business sector to compete globally for manufacturing or services that require well trained and well paid employees.

    January 28, 2014 10:31 am at 10:31 am |
  7. with a grain of salt

    I loved it when Romney explained his proposed tax plan, eliminate the tax on the rich, and two minutes later blamed Obama of having a trickle down economic plan. The gop is very much dependent on people believe their BS. Their worst nightmare is an informed voter, that's why they tell you what to believe .

    January 28, 2014 10:31 am at 10:31 am |
  8. Keith

    It is a good thing. The Bacon Davis wages have been stuck a long time. I have been paying more than the Federal scale for 8 years or so.

    "@ the truth hurts" many are paid less than the new wage. Service people on most military bases are making less than that.

    January 28, 2014 10:33 am at 10:33 am |
  9. JC

    Oust Congress. All of them!

    January 28, 2014 10:34 am at 10:34 am |
  10. Sniffit

    "The owner's demand for their product has not gone up."

    Way to miss the point. When many thousands of gov't contractor employees can afford to spend a bit more for goods and services, it increases demand across a wide spectrum of industries, particular those providing necessities like groceries, household goods, etc. It increases demand throughout the economy.

    January 28, 2014 10:35 am at 10:35 am |
  11. Nick

    Obama is such a genius – he is artificially increasing wages for a very small percentage of workers and using our tax dollars to do it, and claiming it as some type of victory. Wonder what he'll do when Congress refuses to increase the budget for those agencies?

    January 28, 2014 10:35 am at 10:35 am |
  12. Way to go!

    It's about time! Obama is doing the right thing....now if we can get congress to understand that! The minimum wage is way too low. But hey, I'm sure big business will pay off a lot of those in congress to keep wages low....that way they have more to pay the CEOs.

    January 28, 2014 10:35 am at 10:35 am |
  13. Keith

    Ronnie

    You people are crazy! If they raised the minimum wage for everyone to $15 per hour , people would make more money ... Then they would spend more money... Then that would create jobs because it would increase production on items and more workers will be needed to make more things!

    Ronnie is right

    January 28, 2014 10:36 am at 10:36 am |
  14. Malory Archer

    bibleverse1

    $6000 per worker that works 40 per week. Is just not prudent. Tying the current minimum wage to inflation is what is necessary and lower minimum wage for workers under 18 to 5.00 per hr.

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

    Actually, the reason the proposed increase in the minimum wage is so high is because it's been so long and prices have risen so much in the past that that's what's needed just to get American workers above water. The plan also calls for tying the minimum wage increases to inflation, just as you suggest – and something that had it been done that way all along, would have made this whole matter a moot point.

    January 28, 2014 10:36 am at 10:36 am |
  15. Robert Houston

    What is so wrong with offering more money for the labor provided, its time to put an end to industrial slavery.

    January 28, 2014 10:37 am at 10:37 am |
  16. sandyc1963

    There goes small business owners. This will not stop. We need to stop increasing wages and freeze the cost of living. I barely make minimum wage and i barely cover my cost of living. I won't see an increase in my wages that went up here in NY but you know well that products will raise to meet the new employee wage. Now my budget will have to make allowances for the increase. we are in a vicious circle where families are going to have to decide between eating, having a roof or having heat. the cost of owning a vehicle is so expensive that eventually that will have to be a decision.
    unless they

    January 28, 2014 10:37 am at 10:37 am |
  17. Truth Hurts

    More lies, more inaction to follow. Obama is turning out to be the worst President in living memory – all lies and screw up's.

    January 28, 2014 10:37 am at 10:37 am |
  18. The REAL Truth...

    @tom l – 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.
    ---------------------------------
    It's simple.. take some of the HUGE profits that these companies are making (to maximize shareholder greed.. err.. I mean value) and paying to their highly over-paid executives and pay the people that actually "do" the work, a living wage. There's something terribly wrong when a Corporation posts global profits in excess of $7 BILLION, but 35%+ of their US staff are on welfare (to make ends meet). Increasing the minimum wage does not = increased prices. That's just right wing talking points.

    January 28, 2014 10:38 am at 10:38 am |
  19. Rudy NYC

    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.
    ------------------------–
    Let's take your theory/opinion at face value as actual fact. I'll indulbe myself for a moment, and pretend to be a believer in the conservative economic theories. You've established that raising the minimum wage on the poor will erode the income value for the middle class, the next rung upwards socio-economic ladder. So, doesnt' that lead one to further conclude that increasing the incomes of the middle class would erode the income value of the upper class? And, that wouldn't be a good thing, now would it?

    January 28, 2014 10:38 am at 10:38 am |
  20. DWEBSTER

    The only thing holding up the anemic economy right now is the stock market and, in case you didn't notice, even that is starting to tank. And the Obama "year of action" is going to have an even greater negative effect on the market/economy, as he goes about raising the cost of doing business via the taxes, fees, penalties and regulatory burdens they have to pay for. So the only bright spot in the Fraudbama economy is about to get a whole lot dimmer, while the great Fraudmaster tinkers around with smoke and mirrors in an effort to save his bogus legacy from being exposed as the nightmare it really is. Poor fella, he bit off way more than he could chew when he decided to pursue this Pres gig.

    January 28, 2014 10:39 am at 10:39 am |
  21. DWEBSTER

    So the guy that now get paid $10/hour will want his wage increased to a least $13 and the woman that makes $20 will have to have her's raised to $23, and so on up the chain, so they don't feel they have suffered a pay slight. All to be paid for by tax payers? Or does Fraudbama plan on printing more

    January 28, 2014 10:40 am at 10:40 am |
  22. DWEBSTER

    Of course, Obama leaves out the fact that in order pay for it taxes will have to go up or the government will have to increase deficit spending, which in turn will increase the national debt. Obama has a knack for griping about how the nation is going to "pay for" tax CUTS, but, somehow, that never seems to be the case when it comes to more government SPENDING.

    January 28, 2014 10:41 am at 10:41 am |
  23. rs

    Truth Hurts

    More lies, more inaction to follow.
    ______________________
    You mean Boehner and the Right will do LESS? Is that possible?

    January 28, 2014 10:42 am at 10:42 am |
  24. DWEBSTER

    Are the Dems that desperate for votes in 2014 that they are willing to deficit spend and build the debt even more in an attempt to buy an election? By the way, this little move will do NOTHING to promote job growth and will actually cause people to lose their jobs in order to protect the contractor's profit margins, which tend not to be very much on government contract work.

    January 28, 2014 10:42 am at 10:42 am |
  25. Mentallect

    One word: LEADERSHIP!

    January 28, 2014 10:43 am at 10:43 am |
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