Liberals: Obama alone could raise minimum wage for many

January 24, 2014: 4:15 AM ET
obama executive order
President Obama has said he will use whatever executive authority he has to help the middle class and the economy. Liberals say he should do so to raise the minimum wage for federal contract workers.
NEW YORK (CNNMoney)

Just do it, Mr. President.

If Congress won't raise the federal minimum wage, you can. At least for people who work for companies that get federal contracts, subcontracts and grants.

So says a group of liberals in the House and Senate who want President Obama to sign an executive order requiring federal agencies to give preference in awarding contracts to companies that pay workers no less than $10.10 an hour.

Currently the federal minimum wage is $7.25. And there's been a push by Democrats to raise it to $10.10 -- an idea that Obama supports.

Doing so directly and indirectly could raise pay for up to 28 million workers, according to estimates from the liberal Economic Policy Institute.

But there's not a high chance Congress will pass that proposal anytime soon.

That's why 15 senators, led by Bernie Sanders of Vermont, and 17 members of the House, led by Keith Ellison of Minnesota, sent letters to the president urging him to exercise his executive authority.

"Profitable corporations that receive lucrative contracts from the federal government should pay all of their workers a decent wage," the senators wrote in their letter.

Demos, a liberal think tank, estimates such a move -- depending on how broadly it's structured -- could improve wages for up to nearly 2 million low-paid workers.

Related: State with highest minimum wage may hike it again

The White House hasn't taken a position. When asked at a forum last week what the chances were for executive action, Jason Furman, the chairman of the White House Council of Economic Advisers, said that the goal is to raise the minimum wage for all low-wage workers.

"How can we best advance this effort ... to make sure no one in this country is paid less than $10.10 an hour?" Furman said.

His answer: To do so legislatively.

But that doesn't necessarily mean the notion of executive action is dead.

"If the [minimum wage] bill languishes in the House, there's a good chance Obama will use executive authority to raise the minimum wage for employees of federal contractors," said Greg Valliere, chief political strategist of the Potomac Research Group. Republicans would object, he argues, and "simply draw more attention to their refusal to raise the minimum wage."

Obama on social mobility in America

Practically speaking, if the president does sign an executive order, the pay practices of federal contractors and grant recipients likely won't change overnight.

For starters, it could take year or two just for the executive order to be implemented as a regulation, said Daniel Gordon, a government contracts expert who oversaw federal procurement policy for the White House from 2009 to 2011.

Then, when the new guidance takes effect, it would only apply from that point forward to new contracts or contracts up for renewal.

So when might eligible low-wage workers see higher paychecks?

"It could be years," Gordon said. "And in the meantime it would be litigated."

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