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. 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 11:53 am at 11:53 am |
  2. Rudy NYC

    smith wrote:

    @The Real truth...You don`t support or protest capitalism, you accept it and live with it. If you don`t like it that`s your issue.
    ------------------------–
    There's nothing wrong with capitalism. The problem, however, is unrestrained capitalism, which is better known as imperial capitalism. It was imperial capitalism, and the associated plutocracies that arise with it, are what the founders revolted against.

    January 28, 2014 11:53 am at 11:53 am |
  3. PeterD

    President Obama has broke the US GOVT Back. Government can't create Jobs BUT Free Market and Capitalism Does.

    January 28, 2014 11:54 am at 11:54 am |
  4. Chris

    When you live out of your means, and can't manage money or making correct decisions in life 15 and hour wouldn't help people. People 1st need to stop creating families that they can't afford and then complain they can't foot the expenses. Low wage jobs are not designed to provide for a family. That's why many people who have them and choose not to be on the welfare systems worked several jobs to make ends meet.

    January 28, 2014 11:56 am at 11:56 am |
  5. Malory Archer

    Matt

    glad we are cutting benefits for our military...

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

    What benefits are being cut?

    January 28, 2014 11:58 am at 11:58 am |
  6. Rudy NYC

    "So what is new, without the 47% a demo could not get elected, unless he promises free birth control and abortion for all women."
    -----------------------
    That number is growing rapidly, thanks to the Tea Party.. It was 51% in 2012. It could be 54% by 2016.

    January 28, 2014 11:58 am at 11:58 am |
  7. Fair is Fair

    Lynda/Minnesota

    @ Fair is Fair:

    I have a question for you. A silly question no doubt, but something caught my attention yesterday that reminded me of a conversation you had with another blogger a while back. That person called herself "LaCrosse Mom". If I remember correctly, she used a great many .............!!!!!!!!!!!!!!!!??????????? in her posts. Do you recall how many other names she went by when you called her out on it?
    --------
    WOW... well, kudos for having such a fascinating memory. I remember (vaguely) the name you mention but I'll be darned if I remember the aliases (aliai?). It was clear from the diction, grammatical style, and punctuation that it was the same person. If I was to venture a guess, I'd say 3, 4, maybe 5 in total. You see it on both sides of the spectrum... why it's done, I'll never know.

    January 28, 2014 12:01 pm at 12:01 pm |
  8. Malory Archer

    smith

    @Malory- The number of competitors, seasons, weather, cost of product, and demand creates slow periods. ... ...

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

    And as I stated previously, the same people who would be sent home due to those factors following an increase in wages are the same people who are currently sent home for those factors.

    January 28, 2014 12:01 pm at 12:01 pm |
  9. Me

    Dominican mama 4 Obama

    Use that pen Mr. President, and use your phone too!
    You've given the block-everything Congress well over 5 years to do what's right, to compromise, to get things done, and nothing.
    _____________
    Name ONE time president obama has tried to work WITH Congress, I can name a number of times off the top of my head when Congress tried, can you name ONE????

    January 28, 2014 12:04 pm at 12:04 pm |
  10. Malory Archer

    smith

    @Malory- The number of competitors, seasons, weather, cost of product, and demand creates slow periods. ... ...

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

    And the same people who are currently sent home as a result of those factors will be sent home regardless of what they’re being paid.

    January 28, 2014 12:04 pm at 12:04 pm |
  11. PeterD

    If you are going to increase Minimum Wage for High School Drop Outs then Be Ready to Pay $7 for Gal of Milk and $4 for Bread for College degree Americans.

    January 28, 2014 12:05 pm at 12:05 pm |
  12. Joe Biden

    why do all the political articles require pre screening? I propose CNN writes and allows political articles the same way as other articles. ANyone agree? If not, we have turned into china.

    January 28, 2014 12:06 pm at 12:06 pm |
  13. Sniffit

    "Why isn't the congress taking Obama to court for some of his shenanigans?"

    Because this and many other actions Obama can and should take are perfectly legal and constitutional exercises of the Executive Branch's authority and powers under the Constitution. Thus, the GOP/Teatrolls are left with demagoguery, misinformation campaigns and empty bumper-sticker rhetoric that relies on angering a large group of very misinformation, undereducated segment of the population.

    There is no "bypassing Congress" involved here. The POTUS/executive branch has the authority to set the minimum terms of the contracts they solicit when they send out requests for proposals. If Boehner is indicating that the House GOP/Teatrolls will seek to undo any exercises of executive authority by legislating them away, then it will be another instance of them wasting everyone's time and money and deliberately trying to create a constitutional crisis because they just don't want to accept election results.

    January 28, 2014 12:06 pm at 12:06 pm |
  14. Lynda/Minnesota

    @ Fair

    LOL.

    And, thanks.

    January 28, 2014 12:07 pm at 12:07 pm |
  15. SWRealTruth

    With raise, minimum wage fed contractor workers will make $24,000; with or without GED. The poor kid, who was brilliant, went to college, studied hard, got into medical school, and did his residency. He comes out and makes $150,000 a year. However, the new minimum wage worker, because of tax credits for children, etc, has an affected tax rate of 0% plus receives state assistance of $3,000 per year, for a grand total of $27,000. The poor, smart kid, had to borrow $450,000 to get through college, medical school and residency. This cost him $35,000 a year in debt payments for 30 years. With his tax bracket being the highest, plus state taxes, social security and Medicare, the poor smart kid who is now a doctor gets to keep $75,000 after taxes less his $35,000 a year debt payment for a net total of $40,000. So what have we done. To a poor smart kid, he can goof off and have fun, and take home $27,000 or give away 10 years of his life and only get $40,000. The rich elite stay in control, the poor stay in their social class, and to the elitist liberal, the world is in perfect harmony. We have just describe socialism and close to communism. You do not incentivize the poor by feeding them more crumbs. You give them the opportunity at the brass ring. Then the ones who want to goof off can stay poor, but the ones who are willing to study and stay in school can work there way out. This country was built by men and women who started with nothing but because they could prosper through hard work did so. Read Ayn Rand's book, Atlas Shrugged, and it paints a pretty accurate picture of what this type of government leads to.

    January 28, 2014 12:10 pm at 12:10 pm |
  16. Rudy NYC

    Chris

    When you live out of your means, and can't manage money or making correct decisions in life 15 and hour wouldn't help people. People 1st need to stop creating families that they can't afford and then complain they can't foot the expenses. Low wage jobs are not designed to provide for a family. That's why many people who have them and choose not to be on the welfare systems worked several jobs to make ends meet.
    --------------------------------
    I guess that explains why Walmart pays so many of its' employees such low wages. They're all supposed to be high school kids, working a summer job, not people trying to make ends meet after having been laid off. They're not supposed to be people who've been laid off, and followed the advice that says it's better to work at the bottom of the pay scale than it is to collect unemployment. They're not supposed to be actual adults trying to train themselves for a new careeer, but cannot because they have to work so many hours per week, on multiple jobs, that there's no time left for training classes.

    January 28, 2014 12:12 pm at 12:12 pm |
  17. Jeff

    Only for new employees? That certainly won't cause any friction with the old ones. Unless, of course the next step is to announce an immediate hiring freeze....

    January 28, 2014 12:17 pm at 12:17 pm |
  18. Bob

    Uh, this could be legally problematic because many other wages are tied to this wage, so it could lead to automatic increases in other wages, which would definitely be an overstep of his authority.

    January 28, 2014 12:19 pm at 12:19 pm |
  19. c-lo

    The reality of this is that he is not catering to the minimum wage worker, he is trying to win back the unions, whom he alienated with Obamacare. MANY of the national union "contracts" are based on a formula that includes minimum wage. Therefore, when MW goes up, so does the pay for all these union workers. Why do you think it is the union contingent working so diligently for these increases? I can pretty much guess that it's not because they care about 16 year old acne faced kids flipping burgers.

    January 28, 2014 12:24 pm at 12:24 pm |
  20. Malory Archer

    SWRealTruth

    With raise, minimum wage fed contractor workers will make $24,000; with or without GED.

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

    Um, no they won't. At $10.10 an hour that worker would make $21,008 annually before taxes. And with the exception of employees of medical corporations who enjoy no overhead because the corporation priovides their workspace, staff, supplies & equipment and pays their medical malpractice insurance, I don't know any MD who makes $75k a year.

    January 28, 2014 12:25 pm at 12:25 pm |
  21. danomite

    While I agree that minimum wage jobs were meant for high school & college kids, the fact is that retail/service related industries, which mostly pay low wages, make up the bulk of the newly created jobs in our current economy. They are often the only place many, many people can find employment, and there aren't a lot of chances for advancement in these industries. Years ago hard work was noticed and rewarded, but today many of these employers have their choice of people so desperate for work that they can avoid doing so and simply replace anyone who complains about their wages. Yes it would be great if everyone could earn a college degree or learn a skill that would lead to some high paying job, or even open their own businesses, but we all know the cards are stacked against those who come from poor households. People who are willing to work to support themselves should be encouraged to do so by a higher salary then those who sit home and collect public assistance.

    January 28, 2014 12:34 pm at 12:34 pm |
  22. Dean

    Obama seems to have the Midas touch...everyhing he touches turns to...oh...wait...

    January 28, 2014 12:34 pm at 12:34 pm |
  23. sly

    Thank you President Obama for taking steps to help Americans.

    The richest 1% owns 99% of America's income. They are all Rich White Male billionaires. None pay US taxes.

    It doesn't take a rocket scientist to know that multinationals and the billionaires are the true free-loaders in America who have eliminated the jobs, or shipped them offshore.

    Our President again takes steps to improve life for us Americans.

    January 28, 2014 12:34 pm at 12:34 pm |
  24. Pam from Iowa

    Boehner needs to shut the front door, and go sit in the corner!!!!

    January 28, 2014 12:34 pm at 12:34 pm |
  25. Rudy NYC

    SWRealTruth wrote:

    ".... This country was built by men and women who started with nothing but because they could prosper through hard work did so. Read Ayn Rand's book, Atlas Shrugged, and it paints a pretty accurate picture of what this type of government leads to."
    -------------------------
    "Atlas Shrugged" is a complete and utter fantasy. Ayn Rand was an aetheist who admired, and was inspired by, the writings of Karl Marx.

    "How do you tell a communist? Well, it’s someone who reads Marx and Lenin. And how do you tell an anti-Communist? It’s someone who understands Marx and Lenin." Ronald Reagan

    January 28, 2014 12:37 pm at 12:37 pm |
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