January 28th, 2014
06:00 AM ET
7 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. smith

    @Malory- With a dramatic increase of the min wage. would also result an increase of cost on the product. Like or not the corporate business will make max profit. There would be a choice of cutting hrs or raising the cost of product either way the companies will make max profit. You have a problem with the system not the min wage.

    January 28, 2014 01:33 pm at 1:33 pm |
  2. manycatsonekid

    Me

    Paul

    What is the point of even having a House and Senate if Emperor Obama can make whatever decision he wants through these so-called executive powers ?
    --–

    Executive order was used by EVERY president.

    Obama – 168 times
    GW Bush – 291
    Clinton – 364
    HW Bush – 166
    Reagan – 381

    Even George washington used it 8 times.
    ___________
    That is interesting cause a poster posted the same thing earlier with numbers about half of what you posted, liberals can't even keep their lies straight!!!! No one is saying other presidents didn't use executive orders, some things are ok to use it for others like this are not!!

    ____________________________

    The original numbers you call a lie are from the Federal Register, which lists every activity, legislative action, proclamation, or whatever that has happened since the government opened. So how is that "liberal"?

    January 28, 2014 01:34 pm at 1:34 pm |
  3. Me

    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.
    _____________
    Care to back that up by fact?? You can't just say something and hope it is true!! I studied economic theory my entire time in college and your statement is no where near fact! It does depend on the theory that you believe in but I studies pretty much all of them in some degree and your statement is false!

    January 28, 2014 01:35 pm at 1:35 pm |
  4. Sniffit

    "Bread milk eggs will all go up. "

    Your premise is that paying more for low level labor will force the company to increase its prices. Obama is only setting a minimum wage for federal contractors. Therefore, for bread, milk and eggs to go up as per your delusional theory, we'd have to be talking about a federal contractor that the government is paying to sell bread, milk and eggs to the general public in competition with national grocery store chains. Name that contractor.

    *crickets*

    January 28, 2014 01:38 pm at 1:38 pm |
  5. manycatsonekid

    Me

    Paul

    What is the point of even having a House and Senate if Emperor Obama can make whatever decision he wants through these so-called executive powers ?
    --–

    Executive order was used by EVERY president.

    Obama – 168 times
    GW Bush – 291
    Clinton – 364
    HW Bush – 166
    Reagan – 381

    Even George washington used it 8 times.
    ___________
    That is interesting cause a poster posted the same thing earlier with numbers about half of what you posted, liberals can't even keep their lies straight!!!! No one is saying other presidents didn't use executive orders, some things are ok to use it for others like this are not!!

    ________________

    Except those numbers you call a "lie" are straight from the Federal Register, which keeps track of every EO, piece of legislation (proposed and/or passed), proclamation, declaration, signing statement (for you Bush fans) etc. signed since the Continental Congress first convened in 1789.

    It's called "reading for comprehension"–try it sometime.

    January 28, 2014 01:38 pm at 1:38 pm |
  6. Sniffit

    "I agree, it doesn't. All it takes is an over active imagination and an a bad case of paranoia to reach that conclusion."

    And a tinfoil hat...don't forget the tinfoil hat...

    January 28, 2014 01:39 pm at 1:39 pm |
  7. GIUK

    Obama's rise in the minimum wage is all window dressing. Propaganda only.

    January 28, 2014 01:40 pm at 1:40 pm |
  8. Fair is Fair

    Rudy NYC

    Fair is Fair wrote:

    It doesn't take a degree in rocket science to figure out that Obama's executive order would give all of his union buddies a pay raise, even though they make more than the minimum wage.
    ----------––
    I agree, it doesn't. All it takes is an over active imagination and an a bad case of paranoia to reach that conclusion.
    ------–
    Hey... don't take my word for it. Googlez union wages tied to minimum wage. Wall St journal has an excellent piece on it. A little intellectual honesty on your part would go a long way.

    January 28, 2014 01:40 pm at 1:40 pm |
  9. rs

    smith

    @Malory- With a dramatic increase of the min wage. would also result an increase of cost on the product. Like or not the corporate business will make max profit. There would be a choice of cutting hrs or raising the cost of product either way the companies will make max profit. You have a problem with the system not the min wage.
    _________________________
    A $12 minimum wage would add 5 cents to the cost of a Big Mac. Oh, the humanity!

    January 28, 2014 01:41 pm at 1:41 pm |
  10. Me

    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.
    ________________
    No it doesn't sniffit, the price of goods will increase and you will have a net 0 effect!!!! Ever heard of inflation???

    January 28, 2014 01:43 pm at 1:43 pm |
  11. rs

    smith

    @Malory- With a dramatic increase of the min wage. would also result an increase of cost on the product. Like or not the corporate business will make max profit. There would be a choice of cutting hrs or raising the cost of product either way the companies will make max profit. You have a problem with the system not the min wage.
    __________________________
    Moving Walmart workers to Costco salaries would cost repeat Walmart shoppers $12 over the course of a year. Again, oh, the humanity!
    Hot tip- that $1.3 billion raise that the Walton family granted itself could be a wee bit smaller....

    January 28, 2014 01:43 pm at 1:43 pm |
  12. Rudy NYC

    Me wrote:

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

    Care to back that up by fact?? You can't just say something and hope it is true!! I studied economic theory my entire time in college and your statement is no where near fact! It does depend on the theory that you believe in but I studies pretty much all of them in some degree and your statement is false!
    ----------------------------–
    No problem. For at least the last 30+ years, the minimum wage has no kept up with the cost of living, and middle class wages have stagnated. How much more proof do you want?

    January 28, 2014 01:49 pm at 1:49 pm |
  13. Me

    The original numbers you call a lie are from the Federal Register, which lists every activity, legislative action, proclamation, or whatever that has happened since the government opened. So how is that "liberal"?
    ______________
    Did you read my response, I called the posters liberal, tell me I am wrong....Also, you state the "original numbers you call a lie" are from the federal register, then where did your numbers come from that are significantly higher then the "original" post, wouldn't it be the other way around?? My point is, you won't be taken seriously if you posts different numbers that are suppose to represent the same thing....

    January 28, 2014 01:50 pm at 1:50 pm |
  14. jed clampett

    So glenview0818 thinks things aren't as bad as they were for income disparity as they were back when Carnegie, Rockefeller and Morgan owned everything. I would like to ask glenview0818 how he likes 16 hour work days, child labor, etc. Our taxes are LOW right now. We thrive after taxing the wealthiest Americans and that includes the upper middle class. Just look at history.

    January 28, 2014 01:52 pm at 1:52 pm |
  15. smith

    @Rudy-Its not wal-mart`s duty to get people off of food stamps. Instead making people responsible you choose to blame wal-mart.

    January 28, 2014 01:53 pm at 1:53 pm |
  16. Rudy NYC

    tom l

    @Rudy
    ""Atlas Shrugged" is a complete and utter fantasy. Ayn Rand was an aetheist who admired, and was inspired by, the writings of Karl Marx."

    Are you really trying to say that she was a communist? And I would think you would like the fact that she's an atheist and not bound by some mythical guy in the sky.
    -------------------------
    There you go again, making personal attacks based upon that lens, through which you view the world. Paul Ryan has dropped his glowing adoration of Ayn Rand for a reason. I'd bet $10,000 Romney bucks that you can't figure it out. Here's a hint, glaring hypocrisy.

    January 28, 2014 01:54 pm at 1:54 pm |
  17. Rudy NYC

    Fair is Fair wrote:

    It doesn't take a degree in rocket science to figure out that Obama's executive order would give all of his union buddies a pay raise, even though they make more than the minimum wage.
    ----––
    I agree, it doesn't. All it takes is an over active imagination and an a bad case of paranoia to reach that conclusion.
    --–
    Hey... don't take my word for it. Googlez union wages tied to minimum wage. Wall St journal has an excellent piece on it. A little intellectual honesty on your part would go a long way.
    ==========================================================================
    Let's be honest, then. Explain to the class how "Obama's executive order", which applies to future contracts, "would give all of his union buddies a pay raise." I just don't see how future contracts can affect this week's paycheck. Do you?

    January 28, 2014 01:58 pm at 1:58 pm |
  18. Me

    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
    ___________________
    Huge profits??? These giant corporations that do make huge profits pay pretty much every employee higher then minimum wage already, even Mcdonalds pays a little higher than min wage. The companies this will hurt are small businesses that DO NOT make huge profits, they will higher less and have to raise prices!!! I work for a large corporation and the lowest paid employees are paid 50-100% higher than min wage already, I know cause I started at the bottom and moved my way up! And remember, small business make up 80%ish (can't remember the exact percent) of all employers.

    January 28, 2014 02:07 pm at 2:07 pm |
  19. Fair is Fair

    "Let's be honest, then. Explain to the class how "Obama's executive order", which applies to future contracts, "would give all of his union buddies a pay raise." I just don't see how future contracts can affect this week's paycheck. Do you?"
    -------
    You should read the WSJ (and many other) articles on the subject. To summarize, there are many union contracts which stipulate any increase in the minumum wage will automatically trigger raises in union wages. You've missed the point. Whether you've chosen to miss it or inadvertantly missed it is up for conjecture.

    January 28, 2014 02:07 pm at 2:07 pm |
  20. jed clampett

    This is simple, let's just go back to the tax rates from the Bill Clinton years and we'll end up with a budget surplus. Taxes are at historic lows. No wonder we are broke.

    January 28, 2014 02:09 pm at 2:09 pm |
  21. sly

    Great job President Obama – America's lower and middle class are getting screwed as always by the Rich White Billionaires that run this nation, and pay no taxes.

    It is refreshing to have a progressive President who actually thinks education, health care and wages are important. Most of our Presidents cared more about the Military Industrial Complex and the Big Bankers and Big Oil.

    History will view President Obama as one of the best Presidents since 1900.

    January 28, 2014 02:09 pm at 2:09 pm |
  22. Me

    Rudy NYC

    Me wrote:

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

    Care to back that up by fact?? You can't just say something and hope it is true!! I studied economic theory my entire time in college and your statement is no where near fact! It does depend on the theory that you believe in but I studies pretty much all of them in some degree and your statement is false!
    ----------–
    No problem. For at least the last 30+ years, the minimum wage has no kept up with the cost of living, and middle class wages have stagnated. How much more proof do you want?
    ________________
    That proves absolutely nothing you have not shown causation or even correlation....coincidence is more believable!

    January 28, 2014 02:12 pm at 2:12 pm |
  23. smith

    @rs-Where`s those numbers coming from? Did you just think that one up? Sources? If you have one.

    January 28, 2014 02:13 pm at 2:13 pm |
  24. rs

    smith

    @rs-Where`s those numbers coming from? Did you just think that one up? Sources? If you have one.
    ______________________
    Can't swear to it- last week either CNN or Washington Post in print- it played on the network evening news too.

    January 28, 2014 02:24 pm at 2:24 pm |
  25. Rudy NYC

    Fair is Fair wrote:

    You should read the WSJ (and many other) articles on the subject. To summarize, there are many union contracts which stipulate any increase in the minumum wage will automatically trigger raises in union wages. You've missed the point. Whether you've chosen to miss it or inadvertantly missed it is up for conjecture.
    ----------------–
    Last chance. What does a prevailing wage schedule in future federal contracts have to do with "giving all of his union buddies a raise" today? What the WSJ has nothing to do with your claim. Nothing.

    January 28, 2014 02:25 pm at 2:25 pm |
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