Why liberals pushed for executive action on minimum wage

Dem Rep. Keith Ellison has been one of the leading proponents of the executive action that President Obama will announce tonight boosting the minimum wage for employees of federal contractors. In an interview this morning, he argued that this move has broader significance than it first appears.

Ellison noted that this could represent a new direction for the White House — one driven primarily by an acceptance that Congress is simply not going to act to reverse big underlying trends that have eroded the economic mobility of working and middle class Americans for years or even decades.

Today John Boehner said he thinks Obama has the authority to take this action, but argued that it wouldn’t help anyone. “The question is, how many people will this executive action actually help?” the Speaker said. ”I suspect the answer is somewhere close to zero.”

Ellison took strong issue with Boehner’s claim. He said that his conversations with the White House about what this executive order would ultimately look like had persuaded him it could raise wages for at least 200,000 people.

Jonathan Cohn explains: “A 2013 report from the think-tank Demos found that nearly 2 million workers paid through federal contracts and other arrangements made less than $12 an hour.”

“The original study done by Demos said about 2 million, but when you look at the number of contracts that would be impacted, it gets down to a smaller number,” Ellison said.  “Officials told me it will be about 10 percent of that. So this executive order could help around 200,000 people.”

It’s still too soon to be sure how many people this will help, but as HuffPo explains:

According to an Obama administration fact sheet, the executive order will cover “workers who are performing services or constructing buildings and are getting paid less than $10.10 an hour.” Those likely to see bumps in future paychecks include dishwashers, food servers and construction workers. Many work in government buildings, but for private employers.

The executive order to be announced by the president during Tuesday night’s speech will take effect only for “new contracts after the effective date of the order.” The administration will honor existing contracts, but the speech gives notice to contractors to adjust future bids — likely by raising them — to accommodate the higher wages.

Beyond this, Ellison notes that this is an important marker in a broader debate.

“The big picture is that there has been an erosion in the past in economic security for working people — they have experienced increasing debt; students are coming out of school with greater debt; pay has stagnated over the course of decades,” Ellison said. “Congress has said, ‘We will not do anything on immigration, on unemployment benefits, or on the minimum wage.’  The president is now saying he will do what he can.”

Of course, the administration has refused to say what other executive actions are in the works. So we’ll have to see what this shift will really mean in practice. But this may well boost momentum for the push for a minimum wage hike for all workers — and it could signal a new phase in the White House’s push to spread the gains of the recovery more equitably.

“This an important signal,” Ellison concluded. ”It will have actual benefits. But it also means the Obama administration is doing what it can do to get out of this low wage economy.”

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