“A higher minimum wage for federal contract workers will provide good value for the federal government and hence good value for the taxpayer,” says a White House document detailing the executive order Obama will sign. “Boosting wages will lower turnover and increase morale, and will lead to higher productivity overall.”
The president will also call for Congress to raise the minimum wage for all workers from $7.25 to $10.10 an hour beginning in 2015. Democrats will continue to push for a bill sponsored by Sen. Tom Harkin, D-Iowa, and Rep. George Miller, D-Calif., that has the backing of the White House.
But with limited appetite for that bill in the Republican-controlled House, Obama is pushing the minimum-wage hike for contractors as part of his pledge to take unilateral action to boost the economy.
Republicans counter that Obama is overstepping his authority to enact an agenda with little GOP support. They point to the president's decisions to delay key provisions of the Affordable Care Act and his halting of the deportation of DREAM Act-eligible immigrants as examples of executive overreach.
Officials predict Obama’s order could affect hundreds of thousands of people, just a fraction of the estimated 20 million plus individuals who would see a pay hike with an across-the-board increase in the minimum wage.
Obama’s directive will apply only to new federal contracts.
The president on Tuesday will also look to rebut the GOP argument that raising the minimum wage is bad for job creation.
“Businesses like Costco have supported past increases to the minimum wage because it helps build a strong workforce and profitability over the long run,” the White House document says. “Low wages are also bad for business, as paying low wages lowers employee morale, encourages low productivity and leads to frequent employee turnover — all of which impose costs.”