January 28th, 2014
06:00 AM ET
11 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. Thomas

    Why dose the GOP want to turn America into India ?

    We are not a caste system !

    January 28, 2014 11:00 am at 11:00 am |
  2. Sniffit

    "No contractor's wage is even close to minimum wage."

    Really? The large firms and companies we're talking about have no low level secretaries, administrative assistants, sanitation workers, maintenance people, interns, messengers, copy clerks, etc.? Amazing. Obviously, they've figured out a business model far superior to all others.

    January 28, 2014 11:01 am at 11:01 am |
  3. The REAL Truth...

    @smith – Like rs, you know nothing about business mangement or profit & labor.
    --------------------------–
    And you appear to support those who feel that maximizing shareholder greed and executive profits yet know nothing about how to pay workers a living wage.

    January 28, 2014 11:01 am at 11:01 am |
  4. i'malib

    I say raise the wage for everyone on welfare! And another free phone! The rest of you, get back to work. Me, I have reruns of 'Melrose Place' to watch.

    January 28, 2014 11:02 am at 11:02 am |
  5. Malory Archer

    @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.

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

    The same people who would be getting sent home because of "slow periods" are ALREADY being sent home for the same reason. If Americans have more $$$ to spend, those "slow periods" become fewer and further between, as more people have more $$$ to spend. I recall before the housing bubble collapsed in 2007 that it was nearly impossible to find a place to park at the mall, etc. because stores were so full of people shopping (buying on credit unfortunately – but if they had cash they wouldn't have done so). I had to wait TWO WEEKS after I moved into my house in 2004 to have my cable turned on because the demand was so high our service provider couldn't keep up with it! Now the cable company calls me pretty much every day begging me to purchase more services, and a technician can actually come out the next day! The last time they called I told them I was thinking about cancelling my service altogether because I'm paying double what I was paying 10 years ago. I ended up with a 20% rate cut for two years because they're THAT desparate!

    January 28, 2014 11:02 am at 11:02 am |
  6. Minnie Mouse

    Seriously, that's all you can think of are the federal contractors??? Are you wanting over half of our country to continue living in poverty and off of state and federal aid continually. The people you are talking about are already making these wages plus. Make a difference in the rest of the country, with everyone who's working for low minimum wages and raise them all to $10.10 an hour in the states that are not already make that wage.

    Since 1986 to current wages at 7.25, in AR where I am from the wages have gone up yearly at .14 cents per hour. That's ridiculous! That's a gain of roughly $10 a month after taxes, per year for full time. This does not pay for the high costs of living, when prices are always rising and sometimes just because people know they can do it! Like taking advantage of people with propane tanks for heat, to $2 more to where people can't even pay for it. That's crazy!!

    If your plan is to give people more income wage wise, then don't start with the federal contractors because these are not the people who need the help.

    January 28, 2014 11:02 am at 11:02 am |
  7. VJ

    Minimum wage should go with the cost of living... Obama should stress that... I liked what Roland Martin said last night in Al Jazeera TV... President has to pose challenges to GOP then we can see how GOP react...
    GOP = Same old stuff they will do, they don't have not even one simple plan to fix economy and jobs..
    GOP mantra = cut taxes for rich and raise taxes for poor and middle class (like they did in NC state).

    January 28, 2014 11:03 am at 11:03 am |
  8. Larry L

    It's time for the President to give up hope for any Republican support to help the American people. They've made it clear their only interest is obstructionism and pandering to the rich. He should therefore aggressively push forward every initiative without concern for bipartisan support. If the House blocks things to help the people, like they will, Republicans should be constantly and harshly exposed to the public. If the Republican Senators filibuster, Harry Reid need to revoke the rule that has allowed them to render the Senate useless. When Republicans work to lower Social Security and trash Medicare, the President should go to the people with names, numbers, and no regard for civility.

    January 28, 2014 11:04 am at 11:04 am |
  9. Rudy NYC

    smgordon1234

    only for federal contractors?

    Did I vote for that?
    -------------------------
    Nope. There's never been a "vote" regarding the prevailing wage schedules in federal contracts.
    What is blatantly obvious about all of the detractor's against raising the minimum wage for federal contractors is that the detractors have absolutely no idea of what they're talking about. Taxes and spending have absolutely nothing to do with what the President is proposing. What he's proposing has absolutely nothing to do with existing contracts.

    "The action will cover all workers employed under future government contracts, ensuring that none is paid less than $10.10 an hour."

    He's talking about those low wage federal jobs that have been privatized. He's talking about the food service providers in cafeterias of federal buildings. He's talking about the private sector security guards in federal buildings and national parks. He's talking about private sector maintenance workers in federal buildings. He's talking about people working full time jobs, but still find themselves below the poverty line.

    January 28, 2014 11:05 am at 11:05 am |
  10. JC

    There's this common misprrception that we can just raise the minimum wage and that's all we need to do. That's not true. You have to accompany the increase with legislation that safeguards against inflation. Just raising the minimum wage a couple of dollars doesn't seem like much, but it will create a spike in inflation to correct for the increase, leaving those who need the increase right back where they were before. While liberals have great ideas on how to pull people out of poverty, there's a fundamental lack of understanding how those policies will effect everyone. If you don't counterbalance the policy it won't work. Wether it's the minimum wage, the ACA, or changes to social security. You can't just have a one sided bill, and that's what the GOP is trying to tell Obama. The bill that was stalled in congress wasn't stalled because the GOP doesn't want to raise the minimum wage, it was stalled because they want safeguards in place that allows those making minimum wage to be able to keep the increase. As the bill is written now the cost of goods will adjust to absorb the increase.

    January 28, 2014 11:06 am at 11:06 am |
  11. Larry L

    Minnie Mouse

    Seriously, that's all you can think of are the federal contractors??
    ------------
    Federal contractors are what he has control over with executive orders. He can't raise the federal minimum wage across the board without Congress. He can't get Congressional support without the House.

    January 28, 2014 11:06 am at 11:06 am |
  12. The Mayor of Medinah

    So since when is $404.00 a week enough to live on Mr President and that is before deductions? I would say that alivable wage is between 20 to 30 dollars an hour depending on where one lives.

    January 28, 2014 11:06 am at 11:06 am |
  13. KeninTexas

    Why isn't the congress taking Obama to court for some of his shenanigans? He's making up laws as he goes, and ignoring laws that he's supposed to be enforcing. Come on congress, do your job.

    January 28, 2014 11:09 am at 11:09 am |
  14. Sniffit

    "Liberals are very keen to tout the rise in the stock market as a reason for Obama's success."

    Don't get confused again, tom. These are two distinct issues. The fact is that the stock market's numbers show that a lot of economic activity and profit is taking place in some ways, which is good for what it's worth, but it highlights that the DOW and NASDAQ, etc., are also fundamentally and completely disconnected from the economic experience of the vast VAST majority of the public and labor force. Obama has been doing what he can to try to rebuild that connection, but the GOP/Teatrolls are fighting him every step of the way because they believe that enacting and defending policies that further the concentration of wealth into a tiny portion of the populace is one of their best ways to fight demographic shifts they know are unfavorable to their future political power. Nobody deserves $25M per year for managing a labor force of a couple thousand people who receive so little in return for their work that they can barely make ends meet and must sell themselves to the consumer credit provider who provides the best bid for their indenture, etc. That person deserves a slap to the head and his shareholders are scum if they expect him to treat the labor force in that manner so they can reap an easy profit from sowing the subjugation of others. And conservatives want to talk "values"? Don't make me vomit.

    January 28, 2014 11:11 am at 11:11 am |
  15. Tony in STL

    When you lames stop shooting yourselves in the foot, and realize our President is trying to do the best for the common good, ...you'll feel better! It's a start, ...keep it going. Great job Mr. President! Put the pen on the paper!!! Thank you! And I think everyone complaining should just get to go it alone. With whatever they manage to build. Give them their money back & send em' packing.

    January 28, 2014 11:12 am at 11:12 am |
  16. rodboy

    So what is new, without the 47% a demo could not get elected, unless he promises free birth control and abortion for all women. So what will this change This will give a person 20K a year – then when you add the foodstamps and rent subsidy not bad for a person with no skills at all, and no desire to learn any.

    January 28, 2014 11:12 am at 11:12 am |
  17. Gunderson

    Um, Well,
    Plenty of Snake Oil still being sold by the Movers and Shakers no? There are Lies, Lies, and Damned Lies. But !, I have a Bridge in Brooklyn I want to sell you! Also Ralph Kranden if finally getting that raise up from 55 dollars a week for driving that city bus. Would I lie to you.

    January 28, 2014 11:13 am at 11:13 am |
  18. Malory Archer

    Minnie Mouse

    If your plan is to give people more income wage wise, then don't start with the federal contractors because these are not the people who need the help.

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

    Federal contractors aren't federal employees. They're employees of private corporations that are under contract to provide goods & services to federal entities. It's telling the walmarts of the world that if they want to sell things to the federal government under contract, they need to pay their workers a living wage. I once worked for a private legal firm that did child support collections for the state. I wasn't a state employee, but my employer had a contract with the state government to provide a service to the state. Once the contract ended my employer was under no obligation to maintain the same guidelines required when he had the government contract.

    January 28, 2014 11:14 am at 11:14 am |
  19. Duane St.Pete FL

    It's funny how generous Obama is with my tax dollars........

    January 28, 2014 11:15 am at 11:15 am |
  20. Sniffit

    "Liberals are very keen to tout the rise in the stock market as a reason for Obama's success."

    These are two distinct issues. The fact is that the stock market's numbers show that a lot of economic activity and profit is taking place in some ways, which is good for what it's worth, but it highlights that the DOW and NASDAQ, etc., are also fundamentally and completely disconnected from the economic experience of the vast VAST majority of the public and labor force. Obama has been doing what he can to try to rebuild that connection, but the GOP/Teatrolls are fighting him every step of the way because they believe that enacting and defending policies that further the concentration of wealth into a tiny portion of the populace is one of their best ways to fight demographic shifts they know are unfavorable to their future political power. Nobody deserves $25M per year for managing a labor force of a couple thousand people who receive so little in return for their work that they can barely make ends meet and must sell themselves to the consumer credit provider who provides the best bid for their indenture, etc. That person deserves a slap to the head and his shareholders are scum if they expect him to treat the labor force in that manner so they can reap an easy profit from sowing the subjugation of others. And conservatives want to talk "values"? Don't make me vomit.

    January 28, 2014 11:16 am at 11:16 am |
  21. drake mallard

    Why Not Have congress/senate Paid By Minimum-Wage? Ban ALL forms of fundraising/lobbyist for any purpose. that is what has destroyed our government. Politicians have no idea what it means to live like the majority of americans, or the people they represent. maybe changing how they live might change their priorities

    January 28, 2014 11:16 am at 11:16 am |
  22. TruthandConsequence

    The "living wage" is a myth built on the back of an angry left. It is never how much you make, but how much you can buy with what you make. In my state, when a common starter wage was a $1.00 an hour, one could buy a movie ticket for $.75, a coke in a vending machine for $.10 and a semester's tuition at the local state university for $100.00. At $7.25 an hour, that movie ticket costs $10.00, the coke a $1.00 and the semester's tuition? $6,000. In 2014, the coke is more or less at parity, but the film should cost $5.50 and the tuition $725. In most respects, wage increases have not improved buying power, but lessened it. The culprit is inflation mixed with unbridled public costs. States which once put a premium on supporting education are now forced to put a premium on Medicaid and other entitlement programs. Raising wages at the bottom puts pressure all throughout the wage cycle, raising costs passed on to customers and taxpayers while reducing competitiveness in overseas markets. In short, that wonderful $3.00 an hour increase has just increased your cost of living and increased the pressure on your company to fire you. it does not sound like a "living" wage to me...but a death rattle.

    January 28, 2014 11:16 am at 11:16 am |
  23. J

    From $7.25 according to another article?

    January 28, 2014 11:16 am at 11:16 am |
  24. Malory Archer

    The Mayor of Medinah

    So since when is $404.00 a week enough to live on Mr President and that is before deductions?

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

    It isn't but it's a start and it beats the heck out of the $290 a week the current minimum wage pays and that is before deductions.

    January 28, 2014 11:17 am at 11:17 am |
  25. The REAL Truth...

    @tom l – 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.
    --------------------------------–
    Tom, in your haste to jump all over my post with verbiage like "class warfare person", you neglected to take the time to READ and COMPREHEND what I wrote. Had you done so, you would have understood that what I said is that the increase in min wage can easily be offset by existing profits (you still have plenty left for the shareholders), and also understood that I DID NOT state that over 35% of American workers are on welfare... What Is a said was that over 35% of the US employees of a company that had over $7 BILLION in global profits were on welfare. Please try to keep up.

    January 28, 2014 11:17 am at 11:17 am |
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