Obama's Minimum Wage Raise for Federal Contractors Is a Shot Across the GOP's Bow

January 28, 2014 | | New Republic |

Janitors in federal office buildings, food servers at veterans' hospitals, and other workers with low-paying jobs for the federal government may get paid more in the future—at least if President Barack Obama has anything to say about it.

During the State of the Union address on Tuesday evening, Obama willannounce that he is using executive authority to increase the minimum wage for federal contractors, up to $10.10 an hour. The order applies only to new contracts and to renewals when other terms are changing, so it will not have a widespread effect, particularly at first. But Obama has been calling upon Congress to raise the minimum wage for all Americans. One purpose of this move is to set an example that might prod Congress to act.

The idea that federal workers need a raise might seem odd, given all the stories (some true, some not true) about government employees with wages, benefits, and job security that most private sector workers can only envy. But plenty of people whose incomes come indirectly from the federal government aren’t so lucky. A 2013 report from the think-tank Demos (where I used to be a fellow) found that nearly 2 million workers paid through federal contracts and other arrangements made less than $12 an hour. And a 2009 report from the Economic Policy Institute, based on 2006 data, found that about 400,000 workers for federal contractors had wages lower than $10 an hour. And that’s despite laws, like the Davis-Bacon Act, that require federal contractors to pay “prevailing wages” in their communities.

Read Demos' Response: Demos Hails President Obama's Decision To Use Executive Authority to Raise The Pay of Federal Contract Workers