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. Joseph

    I love how everyone thinks they know how this move will affect the economy when they don't have the slightest clue about everything involved. God forbid he try to help people get a better living wage. Why don't you all study to be senior economists, then you can get a job advising future presidents instead of ignorantly whining after reading a simple article.

    January 28, 2014 08:51 am at 8:51 am |
  2. stopdrinkingthekoolaid

    what federal contractor makes mininum wage anyway? lol a very very very small %. Oh wow.. Obumma flexes his presidential muscle. Hope he didn't sprain something before tonights show

    January 28, 2014 08:51 am at 8:51 am |
  3. Steve

    The irony is it will hurt the people it is supposed to help. Jobs either go away or have to be repackaged to justify higher value which require employees with higher skills. I live near Ann Arbor Michigan. I can tell you that the kids from the projects do not get to work at Zingermans but have to take the minimum wage jobs at Taco Bell. Why? Because Zingerman's pays so much it justifies 50K University Undergrad and Graduate Students to pick up some extra money and they have the skills, and motivations such that a project kid with nothing has no chance. The minimum wage jobs I used to work were margianlized for this very reason. My first two jobs were bottle return and signing out computer stations at a lab. Can/bottle return is now done by an automated machine and now one gains access to the lab devices by logging in via a server. Any other concerns are handled by the consultants. No more people are hired to hand out plastic cards.

    January 28, 2014 08:53 am at 8:53 am |
  4. Freddie Fez

    This is an intolerable abuse of power. I demand that senior executives boost their pay and bonuses accordingly to compensate in order for this to be equitable to all people!

    January 28, 2014 08:54 am at 8:54 am |
  5. frank

    If u raise min wage everybody else raised there rates to cover costs. 2 what about those on social security. We don't have enough money now. Frank

    January 28, 2014 08:55 am at 8:55 am |
  6. lmc3

    the President is probably doing the right thing with the wrong method. Voters had better wake up to the fact that Congress is supposed to act on the measures the President is doing by executive order and, if they want to be represented, they will have to elect people who do the right things for the country instead of their political party.

    January 28, 2014 08:56 am at 8:56 am |
  7. Just me

    If you do that, sir – you will find that there are many unintended consequences for which you will not want your name associated with in years to come.

    January 28, 2014 08:56 am at 8:56 am |
  8. Tampa Tim

    Baggers are truly the most uninformed about executive powers of a president. What a sorry lot the GOP has become with their fake outrage

    January 28, 2014 08:56 am at 8:56 am |
  9. Tim Gray

    I wanted to impeach Bush but for other reasons. Executive orders are not all bad though. Most written have not been used to make new law, just telling departments to enforce old law. This however, is creating law. All laws having to do with money, have to originate in the house, period.

    January 28, 2014 08:59 am at 8:59 am |
  10. Tampa Tim

    Increasing the minimum wage increases jobs. Republican economics has been wrong since the Great Depression.

    January 28, 2014 08:59 am at 8:59 am |
  11. Don

    So millions who worked hard to make 'more than minimum wage' will now be making the minimum. Prices for services would go up while there pay would NOT leaving them in a far LESS desirable situation!! Common sense people...... raising the min affects a lot more than just the min wage earners.

    "a minimum wage job will always have a minimum wage lifestyle" no matter how much...... $20/hr = equals a $3 value menu at McD and 7 bucks for milk......

    January 28, 2014 09:00 am at 9:00 am |
  12. Rich

    So the government giving those that work for the government a raise? Guess who has most of the jobs in the the construction industry? Illegal immigrants.

    January 28, 2014 09:00 am at 9:00 am |
  13. BuckeyeJim

    Here is a guy who thinks food stamps help the economy!! How is taking a dollar away from the person that earned it and handing it to one who did not help the economy? The one that earned it would have spent it if it wasn't stolen from him/her and handed to someone sitting on their couch!

    January 28, 2014 09:01 am at 9:01 am |
  14. damiantar

    The problem is there is a mass support by the population, that congress works for, to increase the minimum wage. And yet Republicans are blocking it.

    Republicans seem to forget, yes they have an "R" next to their name, but they work for all of the americans people!

    January 28, 2014 09:03 am at 9:03 am |
  15. Tim Gray

    IMC, that is very true, but perhaps most people don't want to raise minimum wage because of the consequences to everyone else. Raising the wage doesn't make anyone better off because price hikes counter the raise but what it does do is raise the poverty line to the point where another 2 million are considered below that level. You move the goal posts out and all of a sudden, the crowd is on the field.

    January 28, 2014 09:03 am at 9:03 am |
  16. jmh

    SO this order does little for anyone currently employed as a contractor under an existing contract but it does mean that future contracts will probably have fewer people or result in both higher program costs, and as a by-product increased profits (assuming cost plus type contracts using a % rate of retun for the plus part) for the corporation contracting with the government. The higher profits will result in higher bonuses for the partners and upper management of these contractors. Be interesting to see if the compensation at the top increases more than the minimum wages being paid out. If that occurs his policy has just increased the income gap rather than reducing it.

    Seems to me that if the President wanted to address the income differential within our society he would not increase the minumm wage under a federal contract (it's not clear that will even accomplish that goal) but directly address it by requiring corporations bidding for the government contract to implement compensation policies that limit the internal differentials between the top and bottom compensation.

    January 28, 2014 09:03 am at 9:03 am |
  17. shell

    Obama is not taking those shades off over his eyes when he states the economy is improving. The only thing it's improving is that of the upper middle class and the wealthy. Middle class and below are suffering and no 10.10 an hr is going to change that. Increasing minimum wage may cause many people to lose state assistance help with healthcare and be forced to pay hundreds a month out to Obamacare, and could very well be worse off....healthcare costs, job outsourcing, price of gas and food, college kids coming out of college with 60K plus debt and can't find jobs....THIS is why America is failing. Everyone knows that any corporation or business will cut anything they have to to keep profits margins up...and that is the way it is now....and hiking the minimum wage up a few dollars ain't about to fix this mess.

    January 28, 2014 09:03 am at 9:03 am |
  18. Polar Bear

    Totally ineffective on all real issues so he has to make one up. "Income inequality" is a socialist load of.............

    January 28, 2014 09:03 am at 9:03 am |
  19. tv22

    I have to wonder how many minimum wage contractors there are working for the federal government. If they are working for minimum wage then the costs will be simply passed on to the government in terms of a change order on their contract.

    January 28, 2014 09:03 am at 9:03 am |
  20. jeremy

    This is good. Minimum wage is meant to protect workers.

    January 28, 2014 09:03 am at 9:03 am |
  21. Malory Archer

    kingofhearts

    "Executives orders" are the act of a communist dictator. Absolutely no democratic process at all. When are people going to realize this? You are not a KING Obama.

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

    During the first five years of his reign of error, the previous occupant of 1600 Pennsylvania Avenue signed 174 executive orders.

    President Clinton signed 164 in his first five years.

    G. H. W. Bush signed 166 during his FOUR years in office, and rightwing god raygun singed 256 executive orders durning his first five years in office.

    To date, President Obama has signed 167 executive orders.

    A three minute search of the googlez proves it's your heros who are "communist dictators"! Thanks for pointing that out!

    January 28, 2014 09:04 am at 9:04 am |
  22. Lynda/Minnesota

    "We've got to make sure those jobs offer the wages and benefits that let families rebuild a little security."

    Oh, absolutely. Apparently, though, the GOP doesn't agree. One would think the GOP doesn't want success in America after all. At least not those speaking in these forums anyway. These folks thrive on the misery of others.

    January 28, 2014 09:04 am at 9:04 am |
  23. John

    The President is not a King, this is illegal on its face. All spending bills must originate in the house, how is he going to get around that? Someone needs to sue the President for derilection of dury. He has promised to uphold all the laws, not just the ones he likes (see DOMA, immigration).

    January 28, 2014 09:04 am at 9:04 am |
  24. Bill the Cat

    Spend, Spend, Spend, repeat...

    January 28, 2014 09:04 am at 9:04 am |
  25. Blue Dog

    Leading economists agree, this should help the economy in long run. American economy is a consumer economy, more money with consumers means more spending power. We might see sight inflation pressure, but we are living in world of deflation. Inflation right now is not a concern. So, overall good move.
    Im not in favor of executive orders, but congress can't get any common sense reform done these days.

    January 28, 2014 09:04 am at 9:04 am |
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