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

(NEW YORK, NY) – 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.

In response, Demos President-Select Heather McGhee issued the following statement:

“We commend President Obama for using his executive authority to give a boost to hundreds of thousands of hard-working Americans trying to reach the middle class. The nation as a whole benefits from an economy where all workers earn a decent living.

"The nation as a whole benefits from an economy where all workers earn a decent living."

“While it’s unfortunate that the order does not 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 done his part. Now it is up to Congress to finish the job.

“Demos’ research quantified the 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 and property leases were paid less than $12 an hour. Worse, 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 taxpayer dollars are used wisely, and research shows that higher paid service 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. 

"Federal workers paved the way for this victory by organizing, and many stakeholders have supported the Americans working on behalf of the country for low pay. We’re thrilled today to see the work of our partners across the country and, most of all, the efforts of the workers themselves, reach fruition in the President’s announcement.”

Resources:

• Underwriting Bad Jobs: How Our Tax Dollars Are Funding Low-Wage Work and Fueling Inequality

• Underwriting Executive Excess: Inside a $7 Billion Taxpayer Subsidy of Inequality

For more on Demos’ work or to speak with an expert, please contact:

Alex Amend

Associate Director of Communications

[email protected]

917.822.7405

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Demos is a public policy organization working for an America where we all have an equal say in our democracy and an equal chance in our economy. Learn more at www.demos.org.