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. woodie

    As long as the Executives are making millions of dollars per year, the company should be paying it's workers a living wage. I think this kind of accountability is necessary to balance the books.

    January 28, 2014 10:44 am at 10:44 am |
  2. lol

    Government contract work not profitable? Lol.

    January 28, 2014 10:45 am at 10:45 am |
  3. Jason

    Sure, how about we just set the in wage to 20/hr for everyone? That way we can have massive inflation. Even better, why would people work at a harder or more skilled job when they can get the same money or close to it by mindlessly flipping burgers or mopping the floor?

    Just more evidence that Obama only knows how to keep spending more and more of our money and not actually do anything to create jobs and grow the economy.

    January 28, 2014 10:45 am at 10:45 am |
  4. rs

    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
    _________________
    Sure- it is more than 100% above where it was when Mr. Bush wandered off to Texas for the last time. The economy has created 8 million jobs- consistent growth, month-after-month for almost 4 years. Now, considering this has happened with no help from the Right, you want to call failure? If Mr. Obama has failed, what did the GOP do? Crash the economy and walk away.
    Go ahead, run on that!

    January 28, 2014 10:46 am at 10:46 am |
  5. rs

    woodie

    As long as the Executives are making millions of dollars per year, the company should be paying it's workers a living wage. I think this kind of accountability is necessary to balance the books.
    _____________________________
    Corprations have had years of record profits and CEO pay has never been higher. Yes, time to pay the workers!

    January 28, 2014 10:47 am at 10:47 am |
  6. me

    I wonder how many of these contractors use the same Social Security Number.

    January 28, 2014 10:47 am at 10:47 am |
  7. John

    "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!"

    Umm, yes people would make more money and hopefully spend more money. But this also means the products these people are working to make and produce are going to cost a lot more too. What good does that do if a higher cost of goods just cancels out this new higher minimum wage? "Fixing" one problem just creates another...

    January 28, 2014 10:49 am at 10:49 am |
  8. smith

    @Malory-You act like business is always slammed, that is not true. Every business has slow periods daily, monthly, and yearly. During those periods hourly works get cut and the work is put on salary personel. You can`t pay people to stand around during slow periods. Like rs, you know nothing about business mangement or profit & labor.

    January 28, 2014 10:49 am at 10:49 am |
  9. aztekman

    Really? No contractor's wage is even close to minimum wage. Only in politics does one do something knowing that it has absolutely zero direct affect

    January 28, 2014 10:49 am at 10:49 am |
  10. GOP = Greed Over People

    It is obvious the GOP has been at war with President Obama since he took office, so, no whining when he returns fire!

    January 28, 2014 10:50 am at 10:50 am |
  11. smgordon1234

    only for federal contractors?

    Did I vote for that?

    January 28, 2014 10:51 am at 10:51 am |
  12. Mary

    Executive privilege is there for national security concerns, - below states it's usage. What does the minimum wage have to do with national security concerns?? This is not part of the Constitution but merely a rule that Congress can take away - Checks and balances - King Obama might be lost without this little rule

    In the United States government, executive privilege is the power claimed by the President of the United States and other members of the executive branch to resist certain subpoenas and other interventions by the legislative and judicial branches of government. The concept of executive privilege is not mentioned explicitly in the United States Constitution, but the Supreme Court of the United States ruled it to be an element of the separation of powers doctrine, and/or derived from the supremacy of executive branch in its own area of Constitutional activity.

    The Supreme Court confirmed the legitimacy of this doctrine in United States v. Nixon, but only to the extent of confirming that there is a qualified privilege. Once invoked, a presumption of privilege is established, requiring the Prosecutor to make a "sufficient showing" that the "Presidential material" is "essential to the justice of the case" (418 U.S. at 713-14). Chief Justice Burger further stated that executive privilege would most effectively apply when the oversight of the executive would impair that branch's national security concerns.

    January 28, 2014 10:51 am at 10:51 am |
  13. Malory Archer

    sandyc1963

    There goes small business owners.

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

    Actually, this will have no impact at all on "small business owners", except maybe to increase their bottom lines. The vast majority of minimum wage workers are employed by businesses that employ more than 100 workers, and therefore aren't "small businesses". However, once those minimum wage workers start making more $$$, they're going to be able to take their kids to the dentist down the street (small business), get their eyes examined at the optomotrist down the street (small business), seek legal services when necessary (small business), all of which pay well above minimum wage. Then they'll hire a babysitter (small business) so they can use some of their additional wages to go on a much-needed date night (and with any luck they'll dine at a local establishment and put a few more dollars into the pockets of the small businessowner). Then all those small business owners will have more $$$ to expand their business, upgrade equipment, hire more workers and pay them better, and so on and so on.

    January 28, 2014 10:52 am at 10:52 am |
  14. Tevii

    Do ANY Federal Contractors make minimum wage? Minimum wage is for starting up, gaining experience, entry level, right out of school.... not a federal contractor position.
    Way to con the imbeciles into thinking you are doing ANYTHING... .again.

    January 28, 2014 10:52 am at 10:52 am |
  15. Boss Man

    This is an empty promise by Obama. I am agovernment contractor. We have no one on staff that is lower than $15 an hour. But if I was required to pay my staff more by law, I would simply raise my price back to the governent.

    The assumption is that small business owners are raking in massive profits on the backs of labor. This is not true. Margins today are razor thin. Small business is the backbone of the US economy.

    If I owned a Pizza Hut and was forced to raise my labor rates, I would have to raise my prices back to the consumer or find a way of reducing my costs like an automated kiosk. Then I would need fewer employees overall. If I don't do anything but simply increase the wages of staff, I will be out of business.

    No matter how you slice it, more people will lose their jobs with such an increase.

    January 28, 2014 10:52 am at 10:52 am |
  16. Fair is Fair

    How does a minimum wage hike affect those making at or near the new targeted wage?

    For example, say the current minimum was $9 and the proposed was $10.10. Those making $9 are going to get a $1.10 hourly raise, whereas those making $10.00 are only getting a dime. Those making $10.10 get nothing. That doesn't seem very fair.

    Or will every labor grade get $1.10 more? If so, then it's not really a minimum wage increase.

    January 28, 2014 10:52 am at 10:52 am |
  17. No Way Jose

    Unconstitutional move by the amateur in the White House – and for what? To raise the minimum wage for the laziest and least productive of the American workforce (aka Government Workers)? Hopefully this is the one that will get this loser Obama impeached....

    January 28, 2014 10:54 am at 10:54 am |
  18. JSB

    The president seems to think he is KING or DICTATOR in chief not merely President.

    January 28, 2014 10:56 am at 10:56 am |
  19. rapierpoint

    TruthHurts – what lie? The the contractors are going to charge more? That the government will have to pay more? That most of the government's income is taxes so if they have to shell out more money, they're going to have to get it from somewhere? Like increasing taxes? Just what, exactly is the lie?

    January 28, 2014 10:56 am at 10:56 am |
  20. Sniffit

    "why would people work at a harder or more skilled job when they can get the same money or close to it by mindlessly flipping burgers or mopping the floor?"

    Why would anyone work at all if it won't provide enough of a living to meet their basic needs? THAT is the threshold question if you want to talk about motivations and incentives. The promise of America was always that you'd get a fair shake, not a raw deal, but we're about as far into raw deal territory as we've ever been. If you can't answer that threshold question in a sane manner without reliance on ideological rationalizations, it's only because you know the right answer and you're trying to avoid it.

    January 28, 2014 10:57 am at 10:57 am |
  21. tom l

    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.
    ====
    None of that statement is relevant other than to a class warfare person. Do you know what percentage these CEO's make relative to the profits and, even more importantly, to the overall economy. It's miniscule. It's a talking point that will do nothing to improve anything. You realize that those record profits are shared by the...wait for it...share holders! Liberals are very keen to tout the rise in the stock market as a reason for Obama's success. Well, stocks go up based on profit. Average people own these stocks, mutual funds own these stocks. So if you're going to tout the rise of the market then it's important to acknowledge "why" it has gone up. As far as your last statement about 35% being on welfare, I know you're just making that up and realize that isn't even remotely true but rather just your way to emphasize your point. Am I right or do you have a statistic to back up that over 35% of American workers are on welfare.

    January 28, 2014 10:57 am at 10:57 am |
  22. Chris e- al.

    I got a free penny from a g.m. car dealership thru the mail yesterday?

    January 28, 2014 10:58 am at 10:58 am |
  23. hkirwin

    rs

    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
    _________________
    Sure- it is more than 100% above where it was when Mr. Bush wandered off to Texas for the last time. The economy has created 8 million jobs- consistent growth, month-after-month for almost 4 years. Now, considering this has happened with no help from the Right, you want to call failure? If Mr. Obama has failed, what did the GOP do? Crash the economy and walk away.
    Go ahead, run on that!
    ==================================

    Whatever you are smoking is some really serious brain killer. Currently only 62% of Americans are employed. Millions have fell of the unemployment roll and have been unemployed for years. The growth rate you talk about is slower that molasses. It can't even keep up with population growth. the unemployment rate has never fallen below 7% since Obumbles took office, even with the millions that have fallen off the countable rolls. I don't believe that you can even convince yourself with your lies.

    January 28, 2014 10:59 am at 10:59 am |
  24. Serious Truth

    So he tells the working class voters, "See, I will get you more money". Meanwhile back at a managerial meeting for a construction company, "Our labor costs including healthcare are getting out of hand, we cannot hire anyone this year till it gets sorted out". Go ahead Mr. President, all those economists that tell you raising the Minimum Wage is bad are idiots. What do they know about business? Wait! What do you know about business Mr. President? Nothing? But at least people will vote for you because you told them you were going to get them more money. Good job.

    January 28, 2014 10:59 am at 10:59 am |
  25. TheBigT

    Way to go Obama, make government even MORE EXPENSIVE. SMALLER GOVERNMENT is what we want NOT LARGER.

    January 28, 2014 11:00 am at 11:00 am |
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