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. BuckeyeJim

    A typical Obama con job. Does anyone think for a second that someone working under a Federal contract is making less than $15 an hour let alone $10.10 ? This was all for show which is all Obama ever does!!

    January 28, 2014 05:13 pm at 5:13 pm |
  2. sly

    75% of Americans favor President Obama increasing the minimum wage.

    In a country where the top 1% have 90% of the wealth, I'm surprised 25% oppose it, but those are likely the same 25% that had Republicans in Congress Shut Down America.

    Thank you Mr. President.

    Now ... if the Republicans in Congress hadn't quit their jobs, we could've gotten the identical results going through Congress.

    Of course, the Republicans are in Shut Down America mode, so President Obama invoked Executive Priviledge, just like all Presidents do. (We all know Obama has invoked it far LESS than previous Presidents).

    January 28, 2014 05:19 pm at 5:19 pm |
  3. BuckeyeJim

    Obama is extremely generous with everyone else's money!

    January 28, 2014 05:21 pm at 5:21 pm |
  4. BuckeyeJim

    If you want to create jobs and raise incomes, IMPEACH OBAMA AND REMOVE HIM FROM OFFICE!

    January 28, 2014 05:24 pm at 5:24 pm |
  5. rs

    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.
    _____________________
    The GOP got their (well and the Heritage Foundation's) "Individual Mandate" into the ACA.

    January 28, 2014 05:29 pm at 5:29 pm |
  6. rs

    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 8 WaPo

    January 28, 2014 05:30 pm at 5:30 pm |
  7. clindseysmith

    "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."
    So... basically we're now giving more govt money to govt workers and the companies that make profit off supplying minimum wage workers to govt facilities? Awesome plan.

    January 28, 2014 05:33 pm at 5:33 pm |
  8. Kv

    Doesn't anyone realize that we the tax payers will be paying for this. Since the government is paying for these services the costs will be passed onto the taxpayers.

    January 28, 2014 05:34 pm at 5:34 pm |
  9. clindseysmith

    "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."
    So we're now just going to spend more tax payer money on govt contracts that provide minimum wage workers to govt facilities? Sure, those workers will benefit, but so will the companies that run them, since they make more overhead and more profit on the new rates they'll be charging the govt. Awesome plan.

    January 28, 2014 05:35 pm at 5:35 pm |
  10. iowajoe56

    There are three glaring examples of lack of understanding in several posts. One, the current pension amounts of Vets are not being reduced but the rate of % increase in those pensions is being reduced. So, Vets will not see less pension dollars, but the value of the pension over time will increase at a slower pace.

    Two, working for the government at the local, state and federal level does not immediately mean lazy workers. That is anecdotal at best, and can be used in both public and private sectors. It is a useless statement.

    Three, there is nothing that needs to be figured out by the SCOTUS, President's have limited rights to use executive orders. This is nothing new. JB knows this and is just grand standing in the article.

    January 28, 2014 05:41 pm at 5:41 pm |
  11. oldsarg

    Well, Obama just spent a whole lot of money no tax payers asked him to spend. . .

    January 28, 2014 05:48 pm at 5:48 pm |
  12. Me

    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.
    ___________________
    That is just a flat out lie, they pay more in taxes in one year then you will make in 10 life times. They may not pay an extremely high tax PERCENT but bet they pay a TON in dollar figures, 100s of millions if not billions a YEAR. If you are going to make that outrageous claim you better be able to support it with concrete evidence otherwise you will be called out on it.

    January 28, 2014 05:56 pm at 5:56 pm |
  13. iowajoe56

    @ oldsarg Every poll i've seen shows strong, well above a simple majority support, for increasing the minimum wage. Apparently a lot of tax payers are telling Obama to move forward on.

    January 28, 2014 05:58 pm at 5:58 pm |
  14. Name jimmy

    Haha obama is a clown workers will still get nothing.

    January 28, 2014 06:00 pm at 6:00 pm |
  15. sly

    oldsarg
    Well, Obama just spent a whole lot of money no tax payers asked him to spend. . .
    =====
    Yeah oldfart ... only 75% of Americans asked our President to raise the minimum wage to $10.

    Oh wait, as a Confederate Republican, you haven't mastered reading the article yet.

    No wonder y'all lose on every issue – it takes intelligence to read a CNN article before commenting.

    January 28, 2014 06:09 pm at 6:09 pm |
  16. tom l

    @DMFO,
    "You should be embarrassed to post that comment....but you and Fair have a lot in common as I have gleaned from your posts"
    ==================

    You certainly are an interesting woman. Like I said last week, it would be great if we could have a dialogue so I will continue to attempt that. I shouldn't have started out that way with my 2-0 comment because it just makes you defensive, which turns you into an offensive posture and therefore we cannot have any constructive dialogue. I think it would be great if you would understand better where conservatives are coming from with regards to this. Fair is making a very strong point that is being missed, in my humble opinion. There are several unions who have negotiated into their contract that if there is a raise in minimum wage there is an automatic raise in their wages, as well. This particular raise probably doesn't have that effect (although if very well might have that effect) and truly is pretty much an insignificant, only-for-show gesture by President Obama and affects very few. The president has gotten you so excited but what is the real effect and how many will this really affect? Plus this then is just another added expense since taxpayers pay for this raise. The more important discussion should be about minimum wage as a whole and how little that does yet sounds so wonderful.

    I believe that only about 3 million people make minimum wage and the majority of those 3 million are less than 25 years old. There is an argument out there that when you raise minimum wage you suppress employment. I believe that is correct. If I'm a business owner and I allocate $100 towards my workforce that number is not going to raise and even if...IF (which doesn't happen) that increase corresponded to increases in economic activity, it would not have any measurable impact to the average business owner. In fact, in the short run it would have the exact opposite effect. They will still continue to allocate $100 towards their workforce as that is how they have worked out their business plan. What happens? That employer can not hire more people, but less since they have a higher cost per employee. I would hope that an individual has the talent and ability to take a minimum wage job and through hard work and commitment get a raise and not make minimum wage in a reasonable amount of time. I would hope that earning a bigger paycheck corresponded with greater value to the company and greater need to pay the individual more. It's a hollow gesture. The few it affects pales in comparison to how many it impacts in a negative way (rs joked earlier about a Big Mac costing five cents more but that is a clear acknowledgement that it does indeed raise prices) I know you believe different but I hope that you have taken the time to read what I wrote and understand where I am coming from and why I believe what I do. Please feel free to respond and I hope to find out why you believe so strongly in this move.

    January 28, 2014 06:09 pm at 6:09 pm |
  17. Insight

    You fat GOP's suck the blood of the Middle class by giving peanut as wage and get fattened. Enough is enough. I am good with raising the minimum wage.

    January 28, 2014 06:17 pm at 6:17 pm |
  18. kryg

    When wages go up, product prices, in the case of product producing private firms, go up. Where else will they get the money to pay for higher wages. Simple economics.

    January 28, 2014 06:22 pm at 6:22 pm |
  19. EarthWorm

    Yet another abuse of power by this lawless President. Obama has made it obvious he doesn't care about working with anyone. He has become so arrogant that no one will work with him so desperation is now occurring through executive powers! Down South this is nothing new to see because blacks let power go to their heads and they become sloppy at their jobs. Obama reminds me of a fast food worker at Mickey D's who does what they want when they want to when the manger is out.
    Just a reminder...the GOP is watching all this abuse take place and will remind the voters this year do they want anyone from the Democratic party who is telling the American public...snub you, even though its your govt., we will use executive powers to get our way because we know that Obamacare was a flop.
    Dont forget to watch the State of the Union speech to see which lies Obama will carry out this year. Liar in Chief.

    January 28, 2014 06:26 pm at 6:26 pm |
  20. luckjoe

    Thanks for the tax hike Barry. Not coming out of your wallet. You and Mooshelle can continue high azzing on the back of the tax payers.

    January 28, 2014 06:32 pm at 6:32 pm |
  21. Me

    Malory Archer

    smith

    @Malory- Those people aren`t being sent as much as they would if the min, wage jumps 3-4$ an hour.

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

    If more people have more money they're able to buy more things/pay for more services, and everyone's standard of living improves. Simple economics.
    ____________
    wow you no nothing about economics, that money you pay someone has to come from somewhere in the first place and that will be consumers when prices of good rise. Therefore you will have a net 0 effect because the price of goods will cost more! Do you really think money just appears out of thin air?

    January 28, 2014 06:34 pm at 6:34 pm |
  22. tom l

    Me

    Malory Archer

    smith

    @Malory- Those people aren`t being sent as much as they would if the min, wage jumps 3-4$ an hour.

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

    If more people have more money they're able to buy more things/pay for more services, and everyone's standard of living improves. Simple economics.
    ____________
    wow you no nothing about economics, that money you pay someone has to come from somewhere in the first place and that will be consumers when prices of good rise. Therefore you will have a net 0 effect because the price of goods will cost more! Do you really think money just appears out of thin air?
    =====

    There's also one other important factor that isn't being considered which is the cost for this wage increase comes from the taxpayers as we would be employing them through these federal contracts. Mallory probably has no problem with that but I certainly believe that's an important factor in this, as well.

    January 28, 2014 06:46 pm at 6:46 pm |
  23. Mike

    Oh federal workers get $10 yet all the other ppl that don't work for the gov get 8?!? WTF. How is that fair?

    January 28, 2014 06:52 pm at 6:52 pm |
  24. J Guzman

    For all of you scoffing at what federal contractors make, know what you are talking about before you open your traps. As a former contractor for the government, depending what state you are working in, determines your wage, or minimum wage as a federal contractor. And when you are under contract, you get sent to different states. I will tell you that Oklahoma and South Dakota are the poorest states to work in as a federal contractor, with a wage around $8 minimum wage per hour. Sometimes you get lucky, like Washington state, there's was around $18. Just because its federal, doesn't mean everyone gets the same wage across the country. He is at least trying to do something. And for your information, $10.10 per hour is jack for what a lot of contractors do.

    January 28, 2014 06:56 pm at 6:56 pm |
  25. Name REDVELVET

    So it's ok for us to keep workin at 7.25 an hours for 8 hours 5 or 6 days out the week and still not have enough money so lets just keep depending on our goverment who is trying to take and not willing to give by the way. Smh tell thtat to a single mother or or father or even a family tryin to do the best to provide the American dream for there children. Thats right mr obama raise the minimum wage.

    January 28, 2014 06:58 pm at 6:58 pm |
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