President Obama will announce in the State of the Union address Tuesday that he will use his executive power to increase the minimum wage to $10.10 per hour for workers on new government contracts, fulfilling a top demand by liberal lawmakers and groups, according to a White House document.
Obama will also renew his call for Congress to pass legislation to raise the federal minimum wage for all workers from $7.25 per hour to $10.10 per hour by 2015. But the president is taking the executive action with no clear timeline for Congress acting on the broader legislation. Previously, the White House said it wanted to concentrate on the legislative route for boosting the minimum wage.
“Hardworking Americans — including janitors and construction workers — working on new federal contracts will benefit from the Executive Order (EO),” the White House said in a statement. “Some examples of the hardworking people who would benefit from an EO include military base workers who wash dishes, serve food and do laundry.”
An estimated 2 million Americans work on federal contracts, though the number of workers receiving the minimum wage would be a fraction of that.
A survey by the National Employment Law Project of contractors who manufacture military uniforms, provide food and janitorial services, and truck goods found that 75 percent of them earn less than $10 per hour. One in five was dependent on Medicaid for health care, and 14 percent used food stamps.
Obama’s action will only slowly trickle out into workers’ paychecks, beginning in 2015 and at the start of new contracts.
Liberal lawmakers have pushed the White House to use executive powers to boost the minimum wage. Fifteen senators wrote to Obama in the fall, saying that “profitable corporations that receive lucrative contracts from the federal government should pay all of their workers a decent wage.”
The White House argued that a higher minimum wage for federal contract workers would increase morale, reduce turnover and boost productivity. It added that government contractors would be able to manage the increase because only workers on new contracts would be eligible for the boost in the minimum wage.
Obama will also push for passage of a bill sponsored by Sen. Tom Harkin (D-Iowa) and Rep. George Miller (D-Calif.) that would raise the federal minimum wage to $10.10 and index it to inflation. Congress last increased the minimum wage seven years ago.