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. Hans Oei

    We're not going to narrow the gap by increasing Minimum Wage without putting a cap on CEO's (Corporation) salary.

    January 28, 2014 03:38 pm at 3:38 pm |
  2. Protector of Freedom

    Isn’t this the guy who just cut retirement pay for Veterans? Where is he getting the money for this pay raise?

    January 28, 2014 03:41 pm at 3:41 pm |
  3. Joe Biden

    I thought we just have to cut Veterans' benefits? So lazy government workers get more money but our soldiers dying for "our freedom" (cough cough) get shafted?

    January 28, 2014 03:48 pm at 3:48 pm |
  4. srcactus

    Sue Obama and let the Supreme Court decide if he has overstepped his authority. Problem is we, the people, pay the legal fees for the whole magilla.

    January 28, 2014 03:49 pm at 3:49 pm |
  5. Brian Sullivan

    So we'll cut another Stryker Brigade.to pay.forit?????

    January 28, 2014 03:55 pm at 3:55 pm |
  6. Rudy NYC

    @Mr. Economics

    Countries where the average wage is so low that woriking 24/7 would still leave you in poverty are living proof of your theories.

    January 28, 2014 03:55 pm at 3:55 pm |
  7. gts58

    Obama is playing "Small Ball" – he has been a total disaster in both domestic and foreign policy. His Presidency has been nothing short of a total disaster!

    January 28, 2014 03:56 pm at 3:56 pm |
  8. Me

    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.
    ________________
    LMFAO sniffit, I work for a company that employs all of these jobs, well except messengers (we don't live in the 1800s anymore LOL) and everyone of those positions make WAY OVER min wage about 100-150% over min wage so do you have a point??? In fact admins and secretarys are paid very well, they complain the least about their salaries out of all those! You do have one there, interns, they are not paid most of the time (I don't think they are ever but no positive) where I work.

    January 28, 2014 04:11 pm at 4:11 pm |
  9. C Brooks

    Hmmm! If I were a federal contract worker, I would vote for this. More money to buy stuff from China. But then, I wonder how it gets paid for? Oh, I know! Let's borrow it from China until we as a country can get our act together and work toward a balanced budget. We're in for a hard landing if we don't do that. Financial markets will make that choice for us when interest paid to finance the debt equals annual tax revenues.

    January 28, 2014 04:20 pm at 4:20 pm |
  10. Dominican mama 4 Obama

    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.
    ------------------------------------------------
    Give it up Fair.
    Debate, logic, and reading comprehension evidently are not your forte.
    Thats 2 for 2, as in Rudy 2 Fair 0 since yesterday.
    Care to try for 3 – 0?

    January 28, 2014 04:24 pm at 4:24 pm |
  11. Sorry

    Ovawendon

    It would be better if that minimum wage went to everyone, not just government workers/contractors. However, it is a beginning. If we would provide training for people on the job at a lower rate and allowed them to move up the ladder when fully trained it would help. Companies ignoring the long term unemployed does not help, they are overlooking some of the best workers out there and forgetting that they are unemployed because of nothing they did. I was unemployed for almost 2 years. The first year I never even got a call, interview, anything. Even in the first few months of my unemployment. I did take temp jobs and jobs with a much lower pay rate to stay working, but kept getting laid off.
    ______________________________
    Sorry but there is a reason you are the one chosen to be laid off so many times, might not be because you are lazy but there is some reason you just don't see it. Unless every company that laid you off went out of business all together, why do they keep choosing YOU??? I have seen many layoffs in my years of working and they are not chosen randomly, the company is very deliberate in who they choose to lay off. Again, I am not saying you are for sure lazy but something is causing you to always be chosen you just have to figure that out and fix it.

    January 28, 2014 04:25 pm at 4:25 pm |
  12. Rudy NYC

    "LMFAO sniffit, I work for a company that employs all of these jobs, well except messengers (we don't live in the 1800s anymore LOL) and everyone of those positions make WAY OVER min wage about 100-150% over min wage so do you have a point??? In fact admins and secretarys are paid very well, they complain the least about their salaries out of all those! You do have one there, interns, they are not paid most of the time (I don't think they are ever but no positive) where I work."
    --------------------------–
    Well, then prove it. Prove your that suggestion that every company out there pays well above the minimum wage has at least some basis in fact. I'd settle for the majority of companies, but we both know that there are far too many small businesses out there for your suggestion to even be remotely true.

    January 28, 2014 04:27 pm at 4:27 pm |
  13. JustMe

    So the people who make the most money (government workers) get a pay raise, yet the rest of us people who make squat (non government workers) still have to struggle and decide on paying bills or buying food for the week.

    January 28, 2014 04:28 pm at 4:28 pm |
  14. Juan in El Paso

    And not a single one of them will be fast food workers. Heck, Federal contractors must pass background checks and drug tests, so that eliminates a very large number of those who are going to think Obama is helping them at first. Wondern how long it takes the average low information minority Obama supporter to figure out this isn't for them, but it is for whites with no criminal record or drug addictions.

    January 28, 2014 04:33 pm at 4:33 pm |
  15. smith

    @Rudy-Well if a single person can`t pay their bills at a full time job itls time to get a roomate or make cuts to their lifestyle or maybe a second job. Doesn`t change the fact that its not wal-mart`s jobs to keep people off food stamps.

    January 28, 2014 04:36 pm at 4:36 pm |
  16. Constitution

    Laws are made through Congress. Our forefathers created a country with a system of checks and balances, where NO branch of government has more power than another. Congress/ Legis Branch: makes laws,...President/Exec Branch: carry out laws created by Congress, also has the power to veto them....Supreme Court/ Judic Branch: interprets laws using the Constitution, reviews laws....

    DOES ANYONE REALIZE OUR FOREFATHERS WOULD BE ROLLING AND HAVE BEEN ROLLING IN THEIR GRAVES?!?! THIS IS UNCONSTITUTIONAL, AS WELL AS DICTATORIAL! THE POWER RESTS WITHIN THE PEOPLE....

    January 28, 2014 04:37 pm at 4:37 pm |
  17. tom l

    Funny because I have it 2-0 for Fair. She has crushed Rudy.

    January 28, 2014 04:37 pm at 4:37 pm |
  18. tom l

    Remember when Obama the candidate used to complain about Bush acting unilaterally?

    January 28, 2014 04:40 pm at 4:40 pm |
  19. Robertson

    Anyone being paid by the government is being paid by the taxpayer, so prepare for a tax hike on yours truly (us). Raising the minimum wage for everyone creates one primary result: Inflation (hope you all get used to paying $15 for that Drive-Thru Meal). How about this: We limit the number of work visa's per year, we DO NOT grant citizenship to illegal aliens and we grant IT, Engineering, Manufacturing and Banking jobs to American Citizens instead of foreigner nationals. By supplanting Americas from their jobs and granting those jobs to foreign nationals, we increase one thing: the number of Americans on Unemployment.

    January 28, 2014 04:50 pm at 4:50 pm |
  20. Maihoa

    My question is if the minimum wage is raised then where does the government have the extra money to pay for that. Obviously this was not in the planned budget. Obama is doing this to stroke a class warfare again. He is very good at this in the past 5 years.

    January 28, 2014 04:59 pm at 4:59 pm |
  21. Me

    Malory Archer

    Me

    100% agreed, this President needs to learn compromise and stop the me me me attidude. You know Congress might be more will to work with him if he wasn't so unwilling to compromise.

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

    john bohner said he got "98%" of what he wanted from "this President", so it kinda sounds like he's been overly acquiescent in the compromise department. In fact, I'd say boehner's statements make the President look like the Compromiser in Chief. But don't let facts cloud your little mind!
    _________________
    Name one thing Obama has compromised on, ONE?? I could care less what Bohner said show one shred of evidence.

    January 28, 2014 05:01 pm at 5:01 pm |
  22. Dominican mama 4 Obama

    Funny because I have it 2-0 for Fair. She has crushed Rudy
    -------------------------------------------------
    You should be embarrassed to post that comment tom l seeing how I reposted Fair's ill-based assumptions and Rudy's response.
    But I understand.
    You and Fair have a lot in common as we have all gleaned from your posts.

    January 28, 2014 05:01 pm at 5:01 pm |
  23. 99mystic99

    So that's a 39.3% increase, but general schedule Federal workers only get 1% after a 4-year pay freeze? Really?

    January 28, 2014 05:03 pm at 5:03 pm |
  24. Dominican mama 4 Obama

    Wondern how long it takes the average low information minority Obama supporter to figure out this isn't for them, but it is for whites with no criminal record or drug addictions.
    -------------------------------------------------
    So stupid. So confused. So off-topic.
    Ted Cruz is that you?

    January 28, 2014 05:11 pm at 5:11 pm |
  25. it must be said

    Wow.... so government contracters are paying minimum wage huh? Who knew! Most of the time they are bilking the clueless government out of millions and that isn't happening with miimum wage salaries.

    Obama, the clueless, hapless bumbling dictator in action. This is laughable.

    January 28, 2014 05:13 pm at 5:13 pm |
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