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'Step in Right Direction': Obama to Hike Pay for Low-Wage Federal Workers

Move met with applause, but economists and progressives say minimum wage should rise for all US workers

Jon Queally, staff writer

President Obama will sign executive order increasing the lowest paid hourly wage for all federal contract workers to $10.10. (Credit: AP/Susan Walsh)

Leaked indications from the White House that President Obama will use Tuesday evening's State of the Union address to announce a $10.10 minimum wage for all contracted federal employees received applause from economists and progressive lawmakers who have consistently made the case said that a national increase for all workers is needed to address inequality, a floundering economy, and fulfill the promise of shared prosperity.

As the New York Times reports:

President Obama plans to sign an executive order requiring that janitors, construction workers and others working for federal contractors be paid at least $10.10 an hour, using his own power to enact a more limited version of a policy that he has yet to push through Congress.

The order, which Mr. Obama will highlight in his annual State of the Union address on Tuesday night, is meant to underscore an increasing willingness by the president to bypass Congress if lawmakers continue to resist his agenda, aides said. After a year in which most of his legislative priorities went nowhere, Mr. Obama is seeking ways to make progress despite a lack of cooperation on Capitol Hill.

The minimum wage plan provides an example of what he has in mind. Mr. Obama called on Congress during last year’s State of the Union address to raise the minimum wage for workers across the board, only to watch the proposal languish on Capitol Hill, where opponents argued it would hurt businesses and stifle job creation. With prospects for congressional action still slim, Mr. Obama is using the executive order covering federal contractors to go as far as he can on his own.

Calling the move by Obama "a step in the right direction," the Economic Policy Institute, which recently circulated a letter that received signatures from over 600 economists calling for a federal minimum wage of at least $10.10, said the president should be applauded for the executive order.

"The president cannot force Congress to act on raising the minimum wage,but he can, with the stroke of a pen, raise the wages for hundreds of thousands of employees who work for federal contractors," said EPI vice president Ross Eisenbreyin.

Senator Bernie Sanders (I-Vt.) also championed the news which he said would raise wages for hundreds of thousands of low-wage public employees. “The president has made it clear that employees working for government contractors should not be paid starvation wages. This executive order also gives us momentum for raising the minimum wage for every worker in this country to at least $10.10 an hour.”

Though welcomed, the impact of the move is miniscule compared to what it would be if Congress would do the same for all U.S. workers. With the current federal wage stuck at $7.25—where it has been stuck since 2007—an increase across the board would lift pay for an estimated 21 million workers, not just the several hundred thousand that might benefit from the executive order. Moreover, if an actual "living wage" was instituted at the federal level, low-wage employees would see their pay increase dramatically more as most economists place that number, on average, closer to $15 or more.


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