Obama speech to challenge Congress on minimum wage

Obama speech to challenge Congress on minimum wage

Credit: AFP/Getty Images

US President Barack Obama works in the Oval Office of the White House on January 27, 2014 in Washington. Obama is due to deliver his 2014 State of the Union address on January 28.

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by DAVID JACKSON and AAMER MADHANI

USA TODAY

Posted on January 28, 2014 at 10:00 AM

WASHINGTON — President Obama plans to stress executive action in Tuesday night's State of the Union speech, including an order to raise the minimum wage to $10.10 an hour for some federal contract workers, administration officials said.

Obama will also pledge to work with Congress on legislation to increase the federal minimum wage for all workers from its current $7.25 to $10.10, said administration officials who disclosed the plan on condition of anonymity so as not to pre-empt the president's speech.

"The president is using his executive authority to lead by example, and will continue to work with Congress to finish the job for all Americans by passing the (congressional) bill," said a White House statement.

Obama delivers his annual State of the Union speech Tuesday at 9 p.m. ET.

The minimum wage debate highlights a speech in which Obama is also expected to call on Congress to pass a major immigration bill, and to outline his domestic and foreign policy agendas for the year ahead. That includes a variety of executive orders on items such as job training and assistance to the long-term unemployed.

Obama's minimum wage order will cover people who are performing services, such as janitors or construction workers, and are making less than $10.10 per hour.

The impact of the minimum wage executive order is limited. The increase will take effect with contracts signed after Obama's order, and would only apply to contract renewals if other terms of the agreement are changed.

David Cooper, an economic analyst at the Economic Policy Institute (EPI) in Washington, said the announcement of the pay hike is "a good step going forward" but is limited in its reach.

"It's not going to have the same impact that Congress increasing the federal minimum wage for all workers would have, and because it only applies to new contracts or contracts that are renegotiated, it may take a little while before current employees of federal contractors see the increase in their pay," said Cooper, whose organization has been advocating for a minimum wage increase.

In a call with officials at the Economic Policy Institute on Monday night ahead of the announcement, a top economic adviser to the president -- Jason Furman -- told the group that the White House believes the executive action could impact roughly 250,000 people, according to Ross Eisenbrey, vice president at EPI.

While the order might be limited in its reach, supporters who have urged Obama to take executive action for low-paid federal contractors welcomed the news. The decision follows a push by liberal lawmakers on Obama to take action as well as a series of one-day strikes by fast food workers at the Pentagon and Smithsonian who called on Obama for a hike in wages.

"This is a testimony to how much it means for people who work hard to appeal to their government, to rely on their constitutional right to redress grievances as guaranteed in the First Amendment, to peacefully assemble and to make change," said Rep. Keith Ellison, D-Minn., who had been pressing the White House on the issue.

In his address to a joint session of Congress, Obama will also make it clear he is prepared to take executive action in a variety of areas if Congress — including the Republican-run House — does not pass legislation.

"You can be sure that the president fully intends to use his executive authority — to use the unique powers of the office — to make progress on economic opportunity," said White House spokesman Jay Carney, who declined to discuss details of the speech.

Obama is also expected to discuss pledges his team has solicited from major corporations, asking them not to discriminate against the long-term unemployed.

Another expected speech topic: growing income inequality.

After Obama's speech, the Republican response will be delivered by Rep. Cathy McMorris Rodgers, R-Wash.

Kirsten Kukowski, spokeswoman for the Republican National Committee, said Obama's speech will only be more of the same: "From health care to the economy, Americans aren't happy with where Obama has brought this country and we're not sure another rerun of his same speech is going to change that."

Obama will also pledge to work with Congress on a comprehensive minimum wage bill proposed by Sen. Tom Harkin, D-Iowa, and Rep. George Miller, D-Calif., according to the White House statement. The bill would raise the federal minimum wage in stages from $7.25 to $10.10, and index it to inflation thereafter.

Last year, Obama called for an increase in the minimum wage to $9.

The White House statement praises businesses that support a minimum wage increase, including Costco. Obama will follow up his State of the Union speech with remarks Wednesday morning at a Costco store in Landham, Md.

In the coming days, Obama will also speak at a steel plant in West Mifflin, Pa., near Pittsburgh; a General Electric gas engines plant in Waukesha, Wis., near Milwaukee, and a high school in Nashville.

The State of the Union speech comes at a difficult political time for Obama. Over the past year, his approval ratings have fallen to record lows in the wake of problems with the health care law and an uneven economic recovery.

This State of the Union comes less than 10 months before congressional elections in which Republicans are expected to pick up House and Senate seats.

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