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President Obama Takes Action to Raise the Pay of Low-Wage Federal Contract Workers

Amy Traub

Sometimes in America, when low-paid workers stand up and speak out, even the President of the United States takes notice. This is one of those moments.

This morning, the White House announced that President Obama will sign a “Good Jobs” Executive Order requiring government contractors to raise the minimum wage for their lowest-paid workers to $10.10 for all new and renegotiated contracts. The president will include this announcement in his State of the Union Address tonight.

Tonight President Obama will use his executive authority to give a boost to hundreds of thousands of hard-working Americans. The nation as a whole benefits from an economy where all workers earn a decent living.

While it’s unfortunate that the order cannot apply to existing workers until their contracts  are renegotiated, the president’s action adds momentum to the fight for a federal minimum wage increase that would benefit all Americans. In signing this order, the president has taken action. Now it is up to Congress to finish the job.

Demos’ research quantified the expansive size of the low-wage workforce supported by federal taxpayer dollars. We found that nearly two million Americans paid through federal contracts, grants, loans, concession agreements, health care spending, and property leases were paid less than $12 an hour. Worse, our later research showed that the government is spending an estimated $21 to $24 billion a year to pay private contractors for the compensation of top executives. These findings put together describe a major engine of inequality in the center of our economy—underwritten by our tax dollars.

The president has a responsibility to make sure taxpayers dollars are being used wisely, and research shows that better paid workers are more productive, with less turnover. President Obama’s decision today is in keeping with the precedent that ensures that employees working on America’s behalf are treated fairly on the job, and that companies that have the privilege of doing business with the United States are upholding high standards of employment practices.

We’re thrilled today to see the work of our partners across the country reach fruition -- especially the brave federal contract and concession workers organizing with Good Jobs Nation who walked out on strike over and over again in the past year and outspoken members of Congress like Keith Ellison, Raul Grijalva, Eleanor Holmes-Norton and Senator Bernie Sanders who stood up for people working on behalf of America.

I feel so fortunate that I, my indispensable research partner Robert Hiltonsmith, and all my Demos colleagues could be a part of it.