Correction: An earlier version of this story incorrectly stated that Labor Secretary Thomas Perez said that President Obama’s executive order raising the minimum wage for federal contractors would require additional funding from Congress. Perez said it would not require Congress to approve additional spending.
President Obama on Wednesday launched a fresh effort to focus on the minimum wage ahead of this year’s midterm elections, emphasizing the populist economic message that will drive much of this year’s Democratic strategy.
In a White House event, Obama signed an executive order hiking the minimum wage for federal contractors to $10.10 from $7.25 starting next year. He was following through on an announcement he had made ahead of this year’s State of the Union address.
Obama also called on Congress to do the same for all other workers by 2016. Senate Democrats plan to pursue legislation next month doing just that, but House Republicans have no plans to pass it.
The unilateral move for contractors is expected to affect a few hundred thousand workers. The modesty of the step was underscored by Labor Secretary Thomas Perez, who said it would not require more money from Congress.
“The opponents of the minimum wage have been using the same arguments for years, and time and again, they’ve been proven wrong,” Obama said in the East Room, surrounded by minimum-wage workers. “Raising the minimum wage is good for business and it’s good for workers and it’s good for the economy.”
Democrats are looking to send a similar message across the country in competitive House and Senate races. Democratic pollsters say there is broad support for a hike in the minimum wage, which was last raised in 2007, under President George W. Bush.
Republicans argue that increasing the minimum wage is bad for the economy, and say they are developing unspecified counterproposals to be announced later.
“If and when we turn to that issue, I think you’d anticipate Republicans being interested in offering as an alternative, something that might actually create more jobs, rather than something that would destroy jobs,” Senate Minority Leader Mitch McConnell (R-Ky.) said recently. “So, we are prepared to have that debate.”
Before Obama made his remarks, the White House launched a full-court press to shine attention on the issue. The Council of Economic Advisers unveiled a lengthy presentation defending the idea of raising the minimum wage.
Perez also addressed White House reporters during the daily news briefing, describing the thinking behind the new executive order. “If you’re serving food or doing laundry on a military base, if you’re a nursing assistant caring for our nation’s veterans, if you’re staffing the parking lot at a federal courthouse or if you’re working concessions at our national parks, then you deserve a raise,” he said.
Perez said the new minimum wage would go into effect starting Jan. 1, although workers on contracts that don’t reset before then might have to wait three to five years for their raise.
“All federal agencies will be doing this within their existing budget,” Perez said. “The reason why this is the efficient thing to do is because when employers are paying a fair wage, they have a more efficient workforce.”