By Ben PennJeff Kinney
contributed to this report.
Jan. 28 --President Barack Obama will
sign an executive order guaranteeing workers employed through new federal
contracts receive at least $10.10 per hour, the president said during his State
of the Union address Jan 28.
He said he will issue the order “in the
coming weeks” because “if you cook our troops' meals or wash their dishes, you
should not have to live in poverty.”
While the president will continue
to urge Congress to pass legislation that boosts the federal minimum wage to
$10.10 for all workers, the executive action is seen as a swifter approach that
could impact several hundred thousand individuals, including workers in fast
food, construction and janitorial services.
“A higher minimum wage for
federal contract workers will provide good value for the federal government and
hence good value for the taxpayer,” the White House said in a Jan. 28 fact
sheet. “Boosting wages will lower turnover and increase morale, and will lead
to higher productivity overall.”
The order will apply only to new
contracts signed after its effective date “so contractors will have time to
prepare and price their bids accordingly,” the fact sheet said. Covered workers
include those currently paid less than $10.10 per hour employed as janitors and
construction workers, as well as those “performing services” such as military
base workers washing dishes, serving food and doing laundry.
Grijalva (D-Ariz.), co-chair of the Congressional Progressive Caucus, told
Bloomberg BNA Jan. 28 that the president's action will impact some
200,000-300,000 workers, but potentially up to 1 million as new contracts are
The CPC had called on Obama to raise wages for
federal contractors' employees in three separate letters to the president since
last July, but did not hear a confirmation that he would act on their request
until late Jan. 27, Grijalva said.
Professional Services Council, an industry group representing government
contractors in the services sector, took issue with the executive order.
“There is natural concern that, amid a national debate over the minimum
wage, government contractors are being uniquely singled out,” Stan Soloway,
PSC's president and CEO, said in a Jan. 28 statement.
Contract Act, enforced by the Labor Department, already requires federal
contractors to pay wages that are “overwhelmingly” greater than $10.10 per
hour, according to Soloway.
The SCA, which applies to service contracts
with the U.S. or the District of Columbia that are worth at least $2,500,
requires contractors and subcontractors to provide their service employees with
at least the monetary wage rates and the level of fringe benefits that prevail
in the locality, or the rates contained in a predecessor contractor's
collective bargaining agreement.
Alan Chvotkin, the PSC's executive vice
president and counsel, told Bloomberg BNA Jan. 28, “We believe our members pay
fair wages, but we recognize it's important that every worker get a fair
He said the existing mechanisms to set prevailing wages contained
in the Davis-Bacon Act--covering construction workers on federally funded
projects--already work and are “administratively easy by comparison” to an
executive order. “They could do it the easy way, or they could make it hard and
cover more contracts and types of work, which would add to the dichotomy
between the federal marketplace and the commercial marketplace,” Chvotkin
The full scope of the
executive order, including exactly which workers it will apply to and whether
it will be extended to subcontractors, awaits more information from the Obama
Speaking at a press conference Jan. 28, House Speaker
John Boehner (R-Ohio) said he suspects the president has the authority to sign
an executive order setting wages for federally contracted employees, but that
“House Republicans will continue to look closely at whether the president is
faithfully executing the laws.” He went on to estimate that because the order
only applies to future contracts, the number of workers it will actually help
“is somewhere close to zero.”
Joseph Geevarghese, deputy director at the
labor federation Change to Win, acknowledged that because of the complexity of
federal contracting, “there's not a one-size-fits-all policy” that could apply
to all workers at federal buildings earning less than $10.10 per hour.
“The federal government does business through a variety of different
financial mechanisms--contracts, loans, grants, leases, concessions--and I
think they will probably try to figure out how to best apply the principles in
each particular instance,” he said.
The White House did not respond when
asked Jan. 28 whether the minimum wage increase would be extended to
The White House
fact sheet emphasized that Obama is “calling on Congress to finish the job for
all workers by passing the Harkin-Miller bill.”
Legislation known as the
Fair Minimum Wage Act (H.R. 1010, S. 1737), introduced by Rep. George Miller (D-Calif.) and
Sen. Tom Harkin (D-Iowa) in the House and Senate, respectively, would increase
the federal minimum wage from $7.25 per hour to $10.10 in three steps over
several years and index it to inflation thereafter (31 HRR 234, 3/11/13).
The measure, which would also raise the minimum pay for tipped employees,
could receive Senate consideration in early March, but faces an unclear future
in the Republican-controlled House.
“I'm hopeful the president's
leadership will inspire congressional leaders to follow suit by taking action
to raise wages for millions of Americans relying on low-wage jobs to make ends
meet,” Christine Owens, executive director of the National Employment Law
Project, said in a Jan. 28 statement.
To contact the
reporter on this story: Ben Penn in Washington at email@example.com
contact the editor responsible for this story: Susan J. McGolrick at firstname.lastname@example.org
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