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Obama raises minimum wage for new federal contractors

President Barack Obama, surrounded by workers, signs an executive order to raise the minimum wage for federal contract workers Wednesday during a White House ceremony. (Associated Press)
Julie Pace Associated Press

WASHINGTON – President Barack Obama increased the minimum wage for a few hundred thousand federal contractors Wednesday, then pressed the divided Congress to pass broader legislation that would apply to all workers. Obama declared, “It’s the right thing to do.”

Obama first announced the executive order to boost some contractor wages during his State of the Union address last month. He signed the measure Wednesday in a White House ceremony where he was flanked by Americans who would make more money if lawmakers take more sweeping action.

White House officials concede that the executive order, which raises the hourly wage from $7.25 to $10.10, only applies to a small percentage of the more than 2 million federal contractors.

But officials are hoping it generates momentum for Obama’s proposal on Capitol Hill, particularly as both parties try to focus on issues like income inequality and economic mobility.

“Raising the minimum wage is good for business, it’s good for workers, and it’s good for the economy,” Obama said.

The president first called on Congress to increase the minimum wage last year, but the effort languished on Capitol Hill. White House officials say they’re working with lawmakers on a legislative strategy to tackle the issue this year, but it’s unclear when a bill might be voted on or whether it would pass.

The executive order for federal contractors goes into effect next year but only applies to new contracts.

The White House said the order requires that employees who work for tips make at least $10.10 overall. It also prevents contract workers from being paid less than others if they have disabilities affecting their productivity.

A recent survey by the National Employment Law Project found that 77 percent of government contract employees who work in food service, retail or janitorial service earn less than $10 per hour. About 4 in 10 of those workers depend on public assistance programs such as food stamps and Medicaid, the study by the worker advocacy group found.