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Obama Orders Contractors to Hike Wages

Thursday, January 30, 2014

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President Obama has launched his promised “year of action” with an Executive Order requiring new federal construction and service contracts to pay workers at least $10.10 per hour.

The White House released a Fact Sheet: Opportunity for All—Rewarding Hard Work announcing the Executive Order on Tuesday (Jan. 28), several hours before Obama announced it himself during the State of the Union Address.

The order covers workers performing services or construction who are getting paid less than $10.10 an hour.

Obama State of the Union

President Obama issued an Executive Order to raise the minimum wage for federal contractors' employees. He vowed to work with Congress to bring the same rate to the rest of the country.

The current federal minimum wage is $7.25, the level it has been at since July 24, 2009.

New Contracts

The increase will take effect with new contracts after the effective date of the order, so contractors will have time to prepare and price their bids accordingly, the Fact Sheet stated.

"The President has embraced the idea in the past that he can use his authority as President and the powers available to the President to advance his agenda on behalf of the American people," White House Press Secretary Jay Carney said at a briefing Monday (Jan. 27).

'Our Job is to Reverse These Trends'

In his nationally televised speech in the House chamber Tuesday night, Obama also said he wanted to work with Congress to pass a minimum wage bill for the rest of the country.

“I’m eager to work with all of you,” Obama said. “But America does not stand still — and neither will I. So wherever and whenever I can take steps without legislation to expand opportunity for more American families, that’s what I’m going to do.”

minimum wage increase
©iStock / sykono

The real value of today's minimum wage is about the same as in the 1950s, the White House said.

He added: “Those at the top have never done better. But average wages have barely budged. Inequality has deepened. Upward mobility has stalled.

“The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by, let alone to get ahead,” he added. “And too many still aren’t working at all. So our job is to reverse these trends.”

He also announced the creation of a new Treasury savings bond for workers without access to traditional retirement options.

Minimum Wage Legislation

Sen. Tom Harkin (D-IA) and Rep. George Miller (D-CA) introduced the Fair Minimum Wage Act of 2013 (H.R. 1010 and S. 460) last March. The bill, H.R. 3746, was referred Dec. 12 to the House Committee on Education and the Workforce.

"The President is using his executive authority to lead by example, and will continue to work with Congress to finish the job for all Americans by passing the Harkin-Miller bill," the Fact Sheet said.

George Miller-Gregory Reynoso-Tom Harkin

Pizza delivery driver Gregory Reynoso (center) joined Rep. George Miller (D-CA), left, and Sen. Tom Harkin (D-Iowa) when they introduced the Fair Minimum Wage Act of 2013. Reynoso supports his wife and young daughter while earning the current federal minimum wage of $7.25 an hour. 

The bill would raise the federal minimum wage in stages until it hits $10.10 and index it to inflation after that; it would also raise minimum wage for tipped workers for the first time in 20 years.

According to the White House, low wages are bad for business because they lower morale, encourage low productivity, and lead to frequent turnover.

However, House Speaker John A. Boehner called an earlier (and less expensive) version of the Harkin-Miller bill a nonstarter.

“When you raise the price of employment, guess what happens?" the Ohio Republican told CQ Roll Call. "You get less of it.”

Real Value of Wages

The real value of today's minimum wage is about the same as it was in the 1950s, although the average  American family income has doubled since then, the White House said. Currently, a full-time minimum-wage worker makes $14,500 a year.

Minimum wage has been increased 22 times since it was first established in 1938.

On Jan. 1, 13 states raised minimum wage. Twenty-one states now pay workers more than the federal minimum wage.


Tagged categories: Construction; Contractors; Economy; Good Technical Practice; Government; Government contracts; President Obama; Workers

Comment from web stokes, (1/30/2014, 10:19 AM)

Most fed jobs are Davis Bacon anyway and I don't think any trades are below $10.25/hr on DB wages so what's the point?

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