The White House says President Barack Obama’s executive order to increase the minimum wage on new federal contract workers will likely impact a “couple hundred thousand” people.
That’s according to White House spokesman Jay Carney. Obama announced the measure in his State of the Union address Tuesday, but officials would not say at the time how many people would be impacted by the increase in the hourly pay rate from $7.25 to $10.10.
Carney says the White House estimate is imprecise because the executive order Obama will sign is still being finalized. Most of the 2.2 million federal contractors already make more than $10.10.
Obama’s order won’t take effect until 2015 at the earliest and doesn’t affect existing federal contracts, only new ones.
(AP)
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2 Responses
The number is dubious. There aren’t all that many such jobs, and the most likely effects will be to reduce workforce, reduce non-cash benefits, or use automation.
Also remember that in most situation, the federal government insists on contractors paying higher than market rate wages under the pretext these are “union wages”.
It’s all rhetoric with substance.
No. 1: Rhetoric with substance is called an “announcement of a policy.” And how would you know how many jobs are affected by the executive order? I am not saying you don’t knnow, but I am asking, how would you know?
There is a long-standing requirement – I do not know whether it is required by a statute or an executive order – that federal contractors pay wages not less than the “prevailing” wage in the geographic area where the contract is performed (if performed in the US).
As for your speculation about the effect of the President’s executive order on wages, it is contrary to prevailing views of economists on the effects of minimum wage requirements.