Obama’s minimum wage plan has more statutory authority than prior “unilateral” actions

January 29

The headlines about the State of the Union speech predictably say President Obama will “act alone on the economy,” bypassing Congress. The problem is that this is unconstitutional: constitutionally, the president requires congressional authorization for such actions. Already Republicans are decrying the purported constitutional violation from the administration unilaterally setting a higher minimum wage for some federal contractors.

But contrary to Rep. Stephen King’s broad accusations, there is a strong constitutional case for the president’s minimum wage plan, though it is not without doubt. Moreover, the “unilateral” actions the president proposed last night are much narrower and less problematic than many of his prior actions, such as his broad immigration non-enforcement or his selective rewriting and delaying of the Affordable Care Act.

As I wrote yesterday, the president’s rhetoric about “bypassing Congress” obscures the fact that his plan involves exercising discretion delegated to him by Congress in a statute. Without such discretion, there would indeed be a problem. With a statute, the president is not defying Congress- he is implementing its directives. So the president’s adversarial rhetoric actually obscures the strength of his case.

But Congress routinely gives the president to “fill in the gaps” – like how much contractors should be paid – guided only by general principles, because it is not practical to legislate the salary of everyone working for the federal government. So what is important is how much discretion the statute gives, and if the plan falls within it.

The claimed executive authority is said to come from the Federal Property and Administrative Services Act of 1949. This sets no fast and firm rules for contractor pay, but says the Executive shall try to promote “economy and efficiency” in procurement. Paying people more at first glance does not seem to be either economical or efficient, but there are variety of policy arguments that it actually would be, by lowering turnover, for example. Generally, if the president has a colorable argument that it would serve these goals, that is enough for constitutional purposes, and this is what would generally count as a reasonable spin.

Here is the wrinkle. It is clear from the context of the action that the president is not really taking this action to increase the efficiency of federal contracting – if so, he would have done it earlier, presumably. Rather, as the administration says, the goal is to catalyze change in the broader minimum wage, inspire business to raise wages, and nudge Congress. None of those goals is related to federal procurement. However, the law is not terribly good at policing motives, or dealing with “dual-purpose” government action, leaving this measure in fairly good shape.

UPDATE: Hans Bader and others have argued that in some parts of the country, the increased wage could conflict with another statute, the Service Contract Act, to the extent it applies to the contracts. Perhaps the executive order, already expected to be narrow, will carve out such contracts. In any case, the issue would be whether the president’s conciliation of these statutes is correct, not whether he acts without any purported statutory authority. In other words, such a case could be decided without saying anything about the constitution, and given the principle of constitutional avoidance, probably would be.

Eugene Kontorovich is a professor at Northwestern University School of Law, and an expert on constitutional and international law. He also writes and lectures frequently about the Arab-Israel conflict. His academic work has been published in top law reviews, and relied on in historic judicial opinions in the U.S. and abroad. He has also advised the U.S. and Israel governments on international legal challenges. He has been honored with a fellowship at the Institute for Advanced Studies and the Bator Award from the Federalist Society, for leading professors under 40. After law school at the University of Chicago, he clerked for Judge Richard Posner on the U.S. Court of Appeals.
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