Obama to Raise Minimum Wage for Federal Contractors

Carolyn Kaster/AP

This story has been updated.

In his State of the Union address Tuesday night, President Obama will announce he is using his executive authority to raise the minimum wage for workers under new federal contracts to $10.10 per hour.

Obama has asked Congress to increase the minimum wage for all workers from $7.25 per hour to $10.10. As yet, lawmakers have not acted to do so. Raising contractors’ wages can be done through an executive order and does not require Congress’ approval.

In a statement, the White House said the order would cover workers in jobs ranging from janitorial services to construction. “Some examples of the hardworking people who would benefit from an EO include military base workers who wash dishes, serve food and do laundry,” the statement said.

Advantages of raising the contractor minimum wage, the White House said, include increased morale and higher overall productivity. “Raising wages for those at the bottom will improve the quality and efficiency of services provided to the government,” the statement said.

The Obama administration says that since the wage hike will cover only new contracts issued after the order takes effect, contractors will have time to price their bids accordingly.

American Federation of Government Employees President J. David Cox praised Obama's order, but said he should back legislation to increase wages for lower-paid federal employees, too. "If the president is to have any credibility in talking about living wages, he needs to get his own house in order first and do everything in his power to establish $10.10 as the minimum wage for all federal hourly workers,” Cox said.

White-collar salaried federal employees received a 1 percent pay increase for 2014.

In the State of the Union message, Obama will continue to press for a staged increase in the minimum wage for all American workers, and back a measure to index future increases to inflation. 

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