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. conchytonker

    Barack is a Banana Republic "leader"

    January 28, 2014 09:05 am at 9:05 am |
  2. Gib

    It is all about buying votes. Has nothing to do with bettering our people or our economic system. They prefer that we not get along. Gives them more control over all of us. Hate them, not each other.

    January 28, 2014 09:05 am at 9:05 am |
  3. coderneb

    Americans are such suckers for stuff like this. You fall for it everytime. There are NO US Federal contractors getting minimum wage. They are all well above minimum.

    Obama: To improve the growing economy all automobiles must have pneumatic
    tires!

    January 28, 2014 09:06 am at 9:06 am |
  4. Name

    obama the last president im gonna vote for im tired he has proven it doesn't matter who in office their not going to fix no real promblems im tired hearing where in debt duhh when a country. thru congress decide to purchase money from a private intentity like federal reserve its no choice but in debt the nsa no warrant no tapping its that simple a nobel peace prize but used a drone to kill a sixteen year old smh

    January 28, 2014 09:06 am at 9:06 am |
  5. Tim Gray

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

    Please explain this. Even the most ardent Marxist supporter would disagree with that.

    January 28, 2014 09:06 am at 9:06 am |
  6. Pete

    Exactly which federal law is the president implementing with this executive order? Can't point to one? Can't be enforced. His job is to faithfully execute the law, not act like a tyrant.

    January 28, 2014 09:06 am at 9:06 am |
  7. conchytonker

    Blue Dog sez:

    "Leading economists agree, this should help the economy in long run."

    Blue Dog, who are these leading economist you mention. Yep, more Liberal hyperbole.

    January 28, 2014 09:07 am at 9:07 am |
  8. Hamlet

    When I overspend in my budget and I'm in the red, I always give my children a raise. It seems like the right thing to do.

    January 28, 2014 09:08 am at 9:08 am |
  9. Rob

    And so my question is how is this affordable?
    Will the federal workers be getting Benefits and pension?

    Raise it all you want Obama, when it comes down to federal minimum wage increases you will do one of several things:

    1. Hiring will stop.
    2. Hiring will continue but only skilled workers will get jobs.
    3. companies will close their doors since you are also making them deal with Obamacare.
    4. Companies will get rid of benefits or 401 contributions.
    5. Unskilled labor will lose their jobs, and have to get federal assistance (which we know you want. As many Americans living off the government as possible, so you can control them.)

    By the way, Obama is a total control freik. Did any one see the interview with Jay Carney where there is a huge picture of Obama hanging behind him. Not that big a deal right? But under it was a boston red sox hat... With only the B in it. Subtle control friek.

    January 28, 2014 09:09 am at 9:09 am |
  10. Bob

    More abuse of power from the king !

    January 28, 2014 09:09 am at 9:09 am |
  11. g

    all he has to do is throw in a new war ,then mention wage in crease ,the republicans will be cheering the war and will not notice

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

    You can debate the minimum wage, you can debate whether congress should or should no do certain things. But the President of the United States, no matter the party, should not have authority to "order" laws.

    January 28, 2014 09:09 am at 9:09 am |
  13. Akio Miyamoto

    Just last month the buget was so strict that militarty retirement and benifits were cut. But now there is money to boost minimum wage of government contractors that barley earn their pay now. WAKE UP PEOPLE!

    January 28, 2014 09:10 am at 9:10 am |
  14. Obvious Comment

    And all these years I though government was working to keep prices down by using the low bidder. Yet in this case they are adding to inflation because many of the things the government buys just got an increase in labor costs, therefore making them more costly to the taxpayer........

    $10.10 an hour for a government janitor.

    They are contractors after all.

    Think about that.

    January 28, 2014 09:11 am at 9:11 am |
  15. johnpm

    He really does think he is a king doesn't he? Hopefully he will be prosecuted once he out
    out of office.

    January 28, 2014 09:11 am at 9:11 am |
  16. randy

    This sort of thing seems so obvious, actually. Put more money in the hands of the people who go out and spend it. Retailers do better, the economy does better... Sure seems smarter than burning truckloads of greenbacks in Baghdad.

    January 28, 2014 09:11 am at 9:11 am |
  17. Wow

    No big deal, we will just put more ink in the printing presses!!! Make it $20...who cares!!!

    January 28, 2014 09:11 am at 9:11 am |
  18. lavidajudoka

    Obama's heart is in the right place but once again, having never been a business owner, he is very short-sighted on the long-term rammifications. So what this boost in minimum wage really means is that the minimum-wage earners can afford an extra pack of cigarettes or six-pack of beer a week.

    January 28, 2014 09:11 am at 9:11 am |
  19. Bill

    He needed some last minute 'filler' material for his speech. I mean, there isn't a whole lot there to point to in terms of accomplishment.

    January 28, 2014 09:12 am at 9:12 am |
  20. laughnow27513

    'leading' economists couldnt see the 2008 crisis, cant see that QE does nothing but rack up debt, and cant see the final results of the abortive economy their 'advice' has created. All this will do is ensure that less contractors are hired by the govt. Contractors are still driven by profit motive, unlike the govt. So overall very bad news.

    January 28, 2014 09:12 am at 9:12 am |
  21. Wade

    Brilliant. If anyone knew the truth they would realized that most minimum wage job are for those just starting in the work force and most people dont get paid minimum wage anyway. Also saying that people cant work minimum wage jobs and make a living wage is true but that is not what it is designed for. But consider this, sure go ahead and raise it, but remember this. If they do, more jobs will be cut because the companies cant afford to pay more and or they will have to increase their prices to off set having to pay more. That is called inflation.

    January 28, 2014 09:13 am at 9:13 am |
  22. Mike

    Usually jobs that pay minimum wage are held by young adults transitioning to college or other careers. I guess this is the new normal under the Obama Presidency where adults have these type of jobs. I would call Mr Obama's domestic economic policy a complete failure.

    January 28, 2014 09:13 am at 9:13 am |
  23. lavidajudoka

    "Americans are such suckers for stuff like this. You fall for it everytime. There are NO US Federal contractors getting minimum wage. They are all well above minimum."

    This was my initial thought. I've never heard of a Federal contractor getting minimum wage.

    January 28, 2014 09:14 am at 9:14 am |
  24. pjoe

    I'm in favor of raising the minimum wage. I sincerely respect those with the initiative to work when they could be living on government hand-outs for about the same money.

    But I'm sorry President Obama ... $10.10 is not enough.

    We have to make getting a job a step-forward for those stuck in dependency. We must not increase welfare / food-stamps because there must be a clear and immediate financial benefit to getting a job. Right now, for many stuck in dependency, getting a minimum wage job makes no financial sense.

    January 28, 2014 09:16 am at 9:16 am |
  25. TSB8C

    Taking money from other workers through increased taxation and then paying that money to different workers through wage increases does not help the economy or place more money into the hands of consumers to spend. It simply takes it from one person who would have spent it and gives it to another who would have spent it. And Obama claiming to bypass Congress and enact his own laws with no representation of the people and their duly elected reps is a blatant violation of the Constitution.

    January 28, 2014 09:16 am at 9:16 am |
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