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. Dustin

    I still make more in Canada lol

    January 28, 2014 10:01 am at 10:01 am |
  2. Adversity

    It's easy to give federal raises with tax dollars paying the wages. Try doing that with having to sell a product or service.

    January 28, 2014 10:01 am at 10:01 am |
  3. rs

    Garrett from Texas

    So, first, he has a historic increase in federal employees (don't go citing countering arguments that Bush created more government employees – those weren't created by Bush as they were mostly at the state and local level) and now, to keep their loyalty, he's upping their pay grade for bottom end government workers from about $9.75 to $10.10 for an annual increase of $728 a year. That should just about pay for a GS-1s ObamaCare increases to their cost of Health Insurance. Maintaining the governing class.
    _________________________
    Sorry, the federal government based upon the number of people employed has not been this SMALL since 1968. Get your facts straight.

    January 28, 2014 10:02 am at 10:02 am |
  4. BDenver

    Hey man, the 1%ers are the top 1% of income earners and not the people who control 1% of the GDP. You are either trying to confuse others on the issue because you are supporting the rich getting a bigger slice of the pie or you are greatly confused

    glenview0818

    People are always complaining about income disparities greater today then ever, between the rich and poor. Here is a Wikipedia fact, Andrew Carnegie at one time controlled .6% of the entire GDP of the US. He was .4% from holding as much money as the entire 1%'ers to today. He hired a private army larger than the US military at the time to crush union strikes. People need to take a little history lesson before they start talking about "growing income disparities"

    January 28, 2014 10:02 am at 10:02 am |
  5. Lynda/Minnesota

    Chcuk88888
    Grounds for Impeachment?
    ----------

    Oh, absolutely. Call your congressman today. You know? Get the ball rolling. Just to be clear though: if GOPerville chooses to go that route, they might just as well give up the White House for the next few decades. More than likely the Senate and the House too.

    January 28, 2014 10:04 am at 10:04 am |
  6. rs

    Chcuk88888

    Grounds for Impeachment?
    __________________
    A law has to be broken genius. One could make a far better case to send the GOP to Gitmo.

    January 28, 2014 10:04 am at 10:04 am |
  7. Paul

    What is the point of even having a House and Senate if Emperor Obama can make whatever decision he wants through these so-called executive powers ?
    ----------------------

    Executive order was used by EVERY president.

    Obama – 168 times
    GW Bush – 291
    Clinton – 364
    HW Bush – 166
    Reagan – 381

    Even George washington used it 8 times.

    January 28, 2014 10:04 am at 10:04 am |
  8. Merp

    Ok, so where do the executive departments cut costs to balance this against the budgetary spending authorized by Congress? The President does not have the authority to authorize spending beyond approved budget levels.

    January 28, 2014 10:05 am at 10:05 am |
  9. maddog7676

    The Imperial Presidency

    January 28, 2014 10:05 am at 10:05 am |
  10. Cyndy Hamilton

    Minimum wage for federal contractors to be $10.10/hour. Sounds fair for the laundry workers and the food svc people on the mil bases. Hold on a minute! Oh the military got an answer for that. 6 month KP rotations are coming for all active duty.
    And that increase sounds good for the janitors at the fed blgs. Hold on another second! I know personally that NASA Goddard has put in place that as of 2/1 permanent operations crew task reduction – minimizing cleaning tasks and landscape maintenance to just a reduce grass-cutting schedule. Budgets are already being cut in readiness for this change and those who can least afford to lose their jobs are going to – all for a less than a couple of dollar raise.

    January 28, 2014 10:06 am at 10:06 am |
  11. Tom

    It is really too bad most people do not see that raising the minimum wage only helps the poor for about a year, but erodes the income value for all those middle class people everyone keeps claiming to want to help. Are middle class jobs going to go up by 3.00 an hour to compensate for the loss of buying power? I think not. In 12 months the new poverty level job will be 10.10 an hour.

    January 28, 2014 10:06 am at 10:06 am |
  12. JackBriss

    Obama is out of touch with reality. However he is on track to be the next Stalin

    January 28, 2014 10:06 am at 10:06 am |
  13. scmtns

    Virtually all federal contractors who work in a "locality pay" region already make more than $10.10/hour. This latest policy shift will help almost no one, which is good because Congress has not allocated money to pay for it.

    Yet another "feel good" executive decree that doesn't change anything and accomplishes only making his radical base feel like he's doing something. Anyone with two functioning brain cells knows this is is just political theater.

    January 28, 2014 10:06 am at 10:06 am |
  14. Mike

    What naysayers of this measure fail to understand is that the majority of the nation's federal contractors provide technical and business skills that average above min wage pay. This will not impact those jobs or contracts but instead focus primarily on future service contracts that provide janitors, cooks, security guards and other basic services to the government. Just to be clear, a government contractor is NOT a federal employee. What this executive order is designed to do is establish a new wage standard that will ensure businesses who may be considered for future government contracts will pay all employees expected to perform work under those contracts this new minimum wage. This order will not apply to employees of the same company not performing work on government contracts.

    January 28, 2014 10:06 am at 10:06 am |
  15. Jake

    A cost-of-living-adjustment (COLA) increase takes effect annually unless Congress votes to not accept it. (About.com)

    If congress can vote to have their salaries adjusted why should they be allowed to decline the rest of America? They should not be treated any different than the rest of America.

    January 28, 2014 10:07 am at 10:07 am |
  16. The Mayor of Medinah

    Well let’s see what happens to the prices of the services that are provi9ded by those contractors, lets see what happens if this moves out to the public sector with job cuts, or cuts in hours, and increased prices for the products or services that these people provided.

    January 28, 2014 10:09 am at 10:09 am |
  17. Alex Post

    Won't this minimum wage increase cause inflation to rise? Who does that hurt most? Vicious circle. Wages go up. Prices go up. Up, up, up. When have they gone down in the last 100 years?

    January 28, 2014 10:09 am at 10:09 am |
  18. rs

    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.
    ___________________________
    Take a civics class. Meanwhile- does shutting down the government come to mind as something being strictly legal? How about defaulting on the country's full-faith-and-credit"? The GOP is the party of treason, sir, not the President!

    January 28, 2014 10:10 am at 10:10 am |
  19. Just Stop And Think

    Put politics aside and think of the ripple down effect for those of us that make above the $10.10. We won't get increases, but the prices of EVERYTHING will go up to to adjust to the new minimum wage. It's economics, not politics that puts food on my table or clothes my children. They are so out of touch in Washington, but don't care. Not everyone is on Medicaid or working for minimum wage. Some of us are actually working for a living and trying our best to provide without government control... oops... I meant he

    January 28, 2014 10:10 am at 10:10 am |
  20. rs

    Alex Post

    Won't this minimum wage increase cause inflation to rise? Who does that hurt most? Vicious circle. Wages go up. Prices go up. Up, up, up. When have they gone down in the last 100 years?
    ______________________
    Inflation is virtually zero. Increased spending by thousands of Americans will creat jobs.

    January 28, 2014 10:11 am at 10:11 am |
  21. The Mayor of Medinah

    Our leader is clue less, how about a plan to improve the economy and put more people back to work? With more people back to work the labor pool shrinks and wages go up for everyone because of the completion for labor with employers. But this community organizer and his lefty administration is incapable of thinking out of the box. They are all about the taking and not the making, very sad for America. This is also one of the reasons they are so bent on immigration reform is to allow additional labor, High Tech labor into the country to drive down wages for the middles class as well.

    January 28, 2014 10:12 am at 10:12 am |
  22. tom l

    @rs
    "smith

    @Malory- Your logic is flawed. A huge increase in the min. wage will result in hrs. being cut for hourly workers and labor being put on salary folks. Ever heard of profit and labor?
    __________________________
    Ever heard that has no basis in fact?

    =====
    Perhaps, perhaps for federal workers it won't influence the hiring because clearly the govt doesn't care about a bottom line and has no real budget to meet – you need look no further than the building of the ACA website or the govt contractors in Iraq to see how much the govt cares about money and its value. However, common sense and logic follows what smith is talking about. If I'm an employer and have allocated $100 towards employees based on my P&L statement and business plan then that $100 will not change. What will most definitely change is how many people I can hire.

    January 28, 2014 10:15 am at 10:15 am |
  23. rapierpoint

    Interesting. Require all future government contractors to pay at least 10.10. Does everyone see the problem with this? The contractors will have to charge the government more money (to cover the pay increases). Where is the government going to get the money to pay these higher contracts? Increase taxes.

    It's easy to make proclamations like this when it isn't your money you are using to pay people with.

    January 28, 2014 10:15 am at 10:15 am |
  24. rs

    JackBriss

    Obama is out of touch with reality. However he is on track to be the next Stalin
    _________________________
    Care to back that up with a fact? Or did you get that this morning from Glenn Beck?

    January 28, 2014 10:16 am at 10:16 am |
  25. Nick

    Why not a work opportunity tax credit for employers who raise an employees wage x% above the federal poverty level with subsequent WOTC for those providing x% in annual cost of living increases?

    January 28, 2014 10:16 am at 10:16 am |
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