WASHINGTON – President Barack Obama will raise the minimum wage to $10.10 an hour for federal contractors hired in the future, an initiative to be unveiled Tuesday night in his State of the Union address.
Obama will issue an Executive Order for the contract workers - including janitors and construction workers - and repeat his call to reluctant lawmakers to increase the minimum wage for all employed Americans.
Federal contract workers are paid $7.25 an hour, the rate for private-sector employers, White House spokesman Bobby Whithorne said Tuesday in an email. He said he didn’t have a cost estimate for increasing the minimum by 39 percent.
“We believe that this action will produce good value for the federal government,” Whithorne said. “Higher wages will attract higher-quality workers who are more productive, reduce turnover, which can significantly offset the cost of providing higher wages.”
Republicans led by House Speaker John Boehner criticized the action as costing jobs while helping few workers, and a former Obama aide said it could be challenged in court.
The president is fulfilling a pledge made at a Jan. 14 Cabinet meeting to make 2014 “a year of action” by using his executive power. “We are not just going to be waiting” for legislation, adding that “I’ve got a pen and I’ve got a phone,” and pledged to use both to press the Congress.
The wage increase will take effect when new contracts are signed and won’t cover existing employees until their contracts are renewed, according to a White House statement. Valerie Jarrett, senior adviser to Obama, said on Bloomberg Television on Tuesday the order covers “a couple hundred thousand” people.
Boehner, an Ohio Republican, said the move is a bad policy that will result in fewer people being hired as contractors.
“The question is how many people, Mr. President, will this executive action actually help?” Boehner told reporters on Tuesday. “I suspect the answer is close to zero.”