Statement | Wages, Incomes, and Wealth

President Obama’s Move to Raise the Minimum Wage for Federal Contractors is Welcome News

Press release

Requiring federal contractors to pay employees at least $10.10 per hour is a good first step, which EPI has called for, toward ensuring that taxpayer funds are not used to create a larger workforce that is unable to escape poverty and support a decent standard of living. The president cannot force Congress to act on raising the minimum wage, but he can, with the stroke of a pen, raise the wages for hundreds of thousands of employees who work for federal contractors. The president was also right to include employees who get tips, who often are paid far less than the minimum wage. As EPI has estimated, 1 in 5 employees working for private firms for the benefit of the federal government are likely working for poverty wages. This is unacceptable; it is damaging to those workers and their families, and it hurts the economy by reducing demand for goods and services.

There is much that the president can do to raise the wages of America’s workers, which is by far the economy’s core challenge. This executive order will put money in the paychecks of hard working Americans who deserve to make a decent living. I hope that the president’s address tonight also includes action on overtime rules, as well as a strong call to raise the minimum wage for all workers.

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