POLITICS: White House

How many workers will be affected by Obama's minimum wage executive order?

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Beltway Confidential,Opinion,White House,Philip Klein,Minimum Wage

Ahead of tonight's State of the Union Address, the White House has announced that President Obama will sign an executive order raising the minimum wage for workers employed through federal contracts.

The policy is a part of a "year of action" being touted by the Obama administration, in which the president will attempt to impose changes through executive order that he cannot pass through Congress. But the White House document explaining the planned action does not indicate how many Americans will actually be affected by the executive order.

Given the vacuum of information, a number of news outlets have been citing a report from last May authored by the liberal public policy group Demos, which found that "nearly 2 million private sector employees working on behalf of America earn wages too low to support a family, making $12 or less per hour."

Though the 2 million figure has been widely cited, it's worth clarifying several points. To start, the 2 million estimate didn't only include people who were employed through federal contracts, but also workers whose wages Demos estimated were funded through other federal spending, such as Small Business Administration loans, Medicare, and Medicaid. According to the Demos study, the number of workers who are employed directly through federal contracts was 560,000. A spokesman for Demos told the Washington Examiner that this is the category of people the group believes to be covered by the executive order.

But the number covered by the executive order would still be less than this 560,000.

One reason is that Obama's executive order would raise the minimum wage to $10.10 per hour, which is lower than the $12 threshold used by Demos.

Furthermore, the White House specified that, “The increase will take effect for new contracts after the effective date of the order, so contractors will have time to prepare and price their bids accordingly.” In other words, people currently employed through federal contracts won't receive a raise under this executive order, which was a disappointment to Demos, which otherwise commended Obama's action.

It's difficult to say exactly how many people would be affected by this order, but the number isn't likely to be very high. Ultimately, the change is an election year nod by Obama to liberals and unions who have been pressuring him to take action on their issues without being handcuffed by opposition from House Republicans.

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