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. Rudy NYC

    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.
    --------------------
    It's Walmart's FULL responsibility when you're talking about full-time employees. You holler and scream about people going out and finding a job all of the time, and look at what happens when they do. They still need government assistance/ So what's the point in even working if you're still going to need government assistance?

    January 28, 2014 02:28 pm at 2:28 pm |
  2. Jessica McGwin

    It will not work. Instead of raising the minimum wage you need to drop the over all living expenses. The "raise" in the end will further drop the value of the American dollar. They will do it any way but it will back fire and trigger a collapse of the dollar trade value. Mark my words.

    January 28, 2014 02:32 pm at 2:32 pm |
  3. Larry

    Yeah...let's boost the prevailing wage so that every company with a Federal contract and union employees will now TRIPLE their price increases, and we'll get the same shoddy work from the union employees for a higher pay rate.

    No, there's no pandering to the unions, nope, none of that goin' on here.

    January 28, 2014 02:34 pm at 2:34 pm |
  4. sly

    President Obama is taking necessary steps to help hard working Americans pay their rent, in a nation where 99% of the money is controlled by 1% Rich White Males.

    Thank you.

    The President has not bypassed anyone in Congress: The Democrats approve of this, and the Republicans stopped reporting to work in October, when they shut down America and Congress.

    When, or if, the Republicans return to work in Congress, maybe we'll include them, but for now, they've voluntarily quit.

    January 28, 2014 02:36 pm at 2:36 pm |
  5. Jabbadahut

    Circumventing congress says it all.......the Constitution is being cast aside.

    January 28, 2014 02:37 pm at 2:37 pm |
  6. 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!
    ==========================================================================
    I suppose that it is further coincidence that the data for the prior decade or so show middle class wages growing with the minimum wage, too. You're factually challenged.

    January 28, 2014 02:38 pm at 2:38 pm |
  7. Fair is Fair

    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.
    -------–
    You simpley refuse to submit to fact. Last chance, OK? As reported in the WSJ – if minimum wage goes up, stipulations in many union contracts dictate that a correlating increase in union wages occur. Obama's executive order raises the minimum wage and it triggers the wage increase in union contracts. It's not difficult, Rudy.

    January 28, 2014 02:39 pm at 2:39 pm |
  8. Bill Davis

    Love to see burger flippers making 20 an Hour, and burgers 10.00 each...

    January 28, 2014 02:39 pm at 2:39 pm |
  9. Fair is Fair

    "So what's the point in even working if you're still going to need government assistance?"
    -------
    There you have it. In writing. The left wing view. Bravo, Rudy, bravo.

    January 28, 2014 02:42 pm at 2:42 pm |
  10. JSB

    @Bill Davis

    Actually it would be more like Burger flippers making $20 an hour and Burgers at $20 each. :(

    January 28, 2014 02:46 pm at 2:46 pm |
  11. sly

    President Obama – Best President in 50 years:

    - small government: discretionary funding will be at its lowest point in the past 50 years
    - stock market at all time high
    - killed America's #1 enemy, plus Khadafy
    - forced the end of chemical warfare in Syria by threatening both Russia and Syria
    - ended the Bush Oil war
    - legalized health care for disabled veterans, teachers, and others banned from care by BigPharm

    Thank you Mr. President. Because of YOU we will have Hillary Clinton as President until 2024.

    January 28, 2014 02:46 pm at 2:46 pm |
  12. Robert Drabant

    Does anyone think it is odd, that the same government that just had a shutdown is raising its own labor costs?

    January 28, 2014 02:47 pm at 2:47 pm |
  13. Rudy NYC

    Larry

    Yeah...let's boost the prevailing wage so that every company with a Federal contract and union employees will now TRIPLE their price increases, and we'll get the same shoddy work from the union employees for a higher pay rate.

    No, there's no pandering to the unions, nope, none of that goin' on here.
    ----------------------------
    You're not making any sense there, Larry. The vast majority of the low wage, federal jobs that were privatized under the Bush administration were union jobs. You're suggesting that the private companies are employing union workers, which is ridiculous.

    January 28, 2014 02:50 pm at 2:50 pm |
  14. julnor

    I'm glad Obama decided I could pay more for low skill labor. Thanks.

    January 28, 2014 02:59 pm at 2:59 pm |
  15. A Democrat who's Honest about Obama

    Our President won't be happy until he's spent this Nation into oblivion.

    January 28, 2014 03:02 pm at 3:02 pm |
  16. Richard

    The only thing that raising the minimum wages does is make the spending power less for thoses who are not making minimum wages.

    January 28, 2014 03:09 pm at 3:09 pm |
  17. KLN

    Bill Davis wrote:

    Love to see burger flippers making 20 an Hour, and burgers 10.00 each...
    ================================
    Actually, European workers at places like Burger King and McDonalds make around $15 per hour with negligible increase in burger prices. The benefit is that Burger flippers won't need my tax dollars to subsidize them.

    January 28, 2014 03:10 pm at 3:10 pm |
  18. A Democrat who's Honest about Obama

    I could swear he promised to get out nation's financial house in order....
    Apparently his version of "in order" is "bankrupt and creditless".

    January 28, 2014 03:12 pm at 3:12 pm |
  19. Rudy NYC

    You simpley refuse to submit to fact. Last chance, OK? As reported in the WSJ – if minimum wage goes up, stipulations in many union contracts dictate that a correlating increase in union wages occur. Obama's executive order raises the minimum wage and it triggers the wage increase in union contracts. It's not difficult, Rudy.
    -----------------
    Uh, Fair. The executive order is not a universal increase in the minimum wage. All prevailing unioni wages are negotiated. If some contracts, or even legislation, call for automatic increasees in prevailing wages, SO WHAT. None of that has anything to do with your absurd claim that this executive order will amount to a pay raise for every union worker in America.

    January 28, 2014 03:14 pm at 3:14 pm |
  20. Rudy NYC

    Fair is Fair

    "So what's the point in even working if you're still going to need government assistance?"

    There you have it. In writing. The left wing view. Bravo, Rudy, bravo.
    -----------------------–
    It's a rhetorical question, Fair. One which you cannot answer.

    January 28, 2014 03:16 pm at 3:16 pm |
  21. The Blob

    More symbolic, than anything else. There are probably only a handful of federal contractors who's pay is $10 or under. There are some sleazy contractors out there treating employees like slaves, but most federal contractors are hauling in the dough. Many making much, much more than their federal employee counterparts.

    January 28, 2014 03:18 pm at 3:18 pm |
  22. sly

    A Democrat who's Honest about Obama
    Our President won't be happy until he's spent this Nation into oblivion.
    ================
    A fake Democrat who is ignorant: Government spending is at it's LOWEST in 50 years. Do some research before spewing onto the internet.

    January 28, 2014 03:21 pm at 3:21 pm |
  23. Sandra

    Boehner calls raising to $10.10/hr "walking all over" him? WHAT THE HELL IS WRONG WITH THAT MAN?

    January 28, 2014 03:25 pm at 3:25 pm |
  24. Mr. Economics

    According to economic theory, by increasing the wage, you are lowering the availability of the job and raising the quantity demand for the job. So the agencies may fire more workers since it is costing more money. The same principles apply to minimum wage across the board. If you know economics that by raising minimum wage you are setting a price floor. Price floors pay more than equilibrium. We are paying too much according to economic theory.

    Also, personal opinion now. A job doesn't guarantee a living wage, it just guarantees you providing a service for money. It is not the employers job to be responsible for you not making enough to live. If you aren't making enough, take out a second night job, even a third weekend job. Do what you gotta do to live. Don't expect it to be handed to you.

    January 28, 2014 03:26 pm at 3:26 pm |
  25. edmundburkeson

    Seems a fitting surprise for the State of the Unions and Public Workers Address.

    January 28, 2014 03:32 pm at 3:32 pm |
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22