Green Room

About that minimum-wage EO …

posted at 1:32 pm on January 17, 2014 by

Can Barack Obama raise the federal minimum wage by executive order? Reports this week have Obama promising Senate Democrats that he was looking into his options, but they would be limited … even more limited than he thinks, probably:

Obama and congressional Democrats are pushing for an across-the-board hike in the minimum hourly wage, from $7.25 to $10.10. But Republicans are cool to the plan, warning it could hurt the economy.

Federal contractors represent only a fraction of the nation’s employees. Businesses that together received more than $446 billion in federal contracts employ some 2 million workers, only some of whom are paid the minimum wage.

Still, an increase for that segment of the workforce could generate momentum toward a raise for all workers now paid the lowest amount allowable by law.

Proponents of the plan say Obama need not wait for Congress to pass legislation. Sanders and Boxer were among 15 senators who sent a letter to Obama in September, urging him to set a minimum-wage preference for private companies doing business with the federal government.

An executive order to that effect would be tantamount to setting a minimum wage for federal contractors, they said.

“Profitable corporations that receive lucrative contracts from the federal government should pay all of their workers a decent wage,” the lawmakers wrote.

Ace is skeptical:

At first blush, I thought it was possible this would be permissible (if not advisable) under our Constitutional scheme, given that he was directing the Executive itself to make these payments.

But despite that trying-to-be-fair impulse, I’d still like to see legal opinions on this. After all, the President will not be paying these wagesout of his own funds. The excess wages will, of course, be paid for by taxpayers, and absent an act of Congress raising the federal contractor minimum wage, this seems probably illegal.

As usual, of course.

Color me skeptical, too. One cannot write statutory law through EOs, which is what would have to happen to force companies with federal contracts to pay a certain wage or higher to all their workers. That takes Congress to act, and they’re not budging, which is why Obama is gabbing about “looking into” EOs. Even if he issued it, no company would be under any legal requirement to comply.

Obama could require the executive branch to write contracts with that requirement, though, without Congressional involvement. That can be done with an EO, although it probably wouldn’t require one. However, that requirement would force contractors to offer higher bids, forcing the executive branch to go back to Congress for more money, and would likely result in fewer jobs as contractors reduced costs. The same would be true for any attempt to force a higher floor for direct executive-branch jobs, too. Either way, Obama would have to go back to Congress for more funds.

I’d file this in the “cheap talk” category. Figuratively speaking, of course.

Update: Just to clarify my first point in light of some of the comments, EOs only apply to executive branch agencies and their direct employees, not to contractors or those working for contractors.  The latter are bound by statute and the terms of the contract, and nothing more. Obama can pretend that he has the authority to order this in an EO, but contractors will simply ignore it — it can’t be enforced, and won’t be.

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Comments

I wouldn’t put anything passed him…..if he gets desperate enough…….

Like the lefty mj crew said this am….if W did any of the things Obama has done he would have been impeached

cmsinaz on January 17, 2014 at 1:46 PM

Obama will keep pushing the boundaries….

He knows the GOP establishment are wanks who won’t do anything to stop him…..

redguy on January 17, 2014 at 2:02 PM

Reports this week have Obama promising Senate Democrats that he was looking into his options, but they would be limited … even more limited than he thinks, probably:

… because Obama has a clear history of abiding by legal limits to his authority, or something…

Midas on January 17, 2014 at 2:08 PM

Why are Republicans fighting this? They should just cave to keep the attention on Obamacare!!!

besser tot als rot on January 17, 2014 at 2:24 PM

Contractor’s could ignore it …. And never receive another federal contract.

And good luck to a future President or Congress that tried to put it back to less than $10.10.

Effectively, the EO would accomplish the goal.

Expect it to happen.

Carnac on January 17, 2014 at 2:42 PM

Employers will follow suit because everyone is scared to death of this guy and the IRS.

John the Libertarian on January 17, 2014 at 2:52 PM

Employers will follow suit because everyone is scared to death of this guy and the IRS.

John the Libertarian on January 17, 2014 at 2:52 PM

And the media witch hunts…

dogsoldier on January 17, 2014 at 3:10 PM

Don’t forget the added benefit of putting thousands (or millions) more people out of work and onto the federal dole.

dentarthurdent on January 17, 2014 at 3:19 PM

John the Libertarian on January 17, 2014 at 2:52 PM

Only pansies are.

Nutstuyu on January 17, 2014 at 3:41 PM

Since when does the law and the Constitution mean anything to these people?

Their attitude is “stop me if you can”.

jnelchef on January 17, 2014 at 4:46 PM

You know, an enterprising journalist could ask how much Obama’s union buddies pay protestors/ strikers, or how much administration interns are paid…

:)

(I know- not likely)

cs89 on January 17, 2014 at 6:20 PM

All sides of this discussion are ignoring the fact that the Davis-Bacon and Related Acts (DBRA) require payment of prevailing wages to laborers and mechanics employed on federal and federally-assisted construction projects.

And the McNamara-O’Hara Service Contract Act requires payment of prevailing wage rates and fringe benefits to service employees employed on contracts to provide services to the federal government.

These are laws passed by Congress, not executive orders.

And federal contractors need to hire employees to do the work.

Bottom line: This may just be PR which would change the wages of few, if any, employees of federal contractors.

However, such an executive order would be illegal.

slp on January 17, 2014 at 6:24 PM

However, such an executive order would be illegal.

slp on January 17, 2014 at 6:24 PM

“Illegal” as in running guns to Mexican drug gangs, ignoring laws already on the books, and using the IRS as a personal army to target political opponents?

I don’t think that word is an effective deterrent to this administration.

Xavier on January 17, 2014 at 9:07 PM

EOs only apply to executive branch agencies and their direct employees, not to contractors or those working for contractors. The latter are bound by statute and the terms of the contract, and nothing more. Obama can pretend that he has the authority to order this in an EO, but contractors will simply ignore it — it can’t be enforced, and won’t be.

..OH… Want to bet!

KOOLAID2 on January 17, 2014 at 10:08 PM

The real trick is that almost nobody working for a federal contractor is making minimum wage anyway. There aren’t many contracts to flip burgers, food services have gone more to a concession arrangement where the provider pays for the spot. Either way, existing contracts can’t be changed with an EO.

There would never be a need to go back to Congress for more money for future contracts, though, for the same reason. The number of workers actually affected by the change is insignificant.

It’s the symbolism Obama is after, as usual. He doesn’t care any more about low wage workers than he does about your health care. It’s just a box on the leftist agenda he wants to check, effective or not isn’t important.

Adjoran on January 18, 2014 at 1:11 AM

The Government already has this in place – It is called the Wage Determination Act. It is a schedule of rates for different skills that is the minimum that must be paid to any worker under a Government contract. All he has to do is put out a EO that mandates it be included in all Govt contracts. By the way these rates are much higher than Minimum Wage…http://www.wdol.gov/sca.aspx

triumphus04 on January 18, 2014 at 7:48 AM

Obama uses the NSA to get dirt on everyone. He then uses it to threaten dissenters. Hence why the GOP acts as eunuchs. The media is helping him too.

RavingLunatic on January 18, 2014 at 12:15 PM

I bet Obama raises the minimum wage for all before the 2016 election to set off a class war. Of course, he’s hoping that benefits Hillary.

PattyJ on January 18, 2014 at 2:28 PM

Federal minimum wage is $7.25 per hour;
Lowest pay grade in Federal employ is Grade 1 at $8.53 per hour.

Obama’s EO is a typical empty gesture, since no one in the Federal Government actually gets minimum wage. Empty suit; empty gesture.

But if the President is allowed to adjust the wage rates by EO, it creates other problems. Not only for the precedent that it sets, but in fact unless he off-sets the increased compensation by cuts elsewhere in the salary authority, he is usurping the power of the House of Representatives, which is the only body that may raise revenue bills.

Will they let him get away with it? With Boehner in there – probably.

(Sigh)

ss396 on January 18, 2014 at 2:58 PM

warning it could will hurt the economy.

This is why the GOP loses.

AshleyTKing on January 18, 2014 at 5:42 PM

Contractor’s could ignore it …. And never receive another federal contract.

Umm . . . no. They are called contractors because they bid on contracts. They could still bid on future contracts. If they lost a future contract because they refused to obey a dodgy executive order, they would appeal the loss in court, and probably succeed in getting the award thrown out.

If the request for proposal specified a specific wage rate, they could offer two bids, including one at the lower wage rate, appeal the award if they did not get it on the lower bid , and again probably will win the appeal. Because EOs that violate statute law have no validity, and in this case, the bidder has standing to sue. (Most illegal EOs skate because of lack of standing.)

No Truce With Kings on January 19, 2014 at 12:33 PM

He is about to go into full Chavez mode so I wouldn’t put it past him.

tomas on January 19, 2014 at 12:40 PM

Slightly off topic, the liberal canard about worker productivity increasing faster than the minimum wage, does anyone know how that is calculated? Is it something like GDP divided by the number of workers? If so, doesn’t it really reflect the increasing role of technology in replacing pelople more than increased productivity of minimum wage workers? If so, won’t increasing the minimum wage continue to drive this-replacing people with machines?

talkingpoints on January 19, 2014 at 3:17 PM

“Profitable corporations that receive lucrative contracts from the federal government should pay all of their workers a decent wage,” the lawmakers wrote.

Notice they did not say a LIVING wage, but a DECENT one. Neither term has an objective definition, but DECENT seems more palatable – who can object to DECENT? Once wages move up to a DECENT level, the next push will be for a LIVING level – whatever that is.

Marcola on January 19, 2014 at 8:59 PM

Great…
An Executive Order to increase the minimum wage and end the war on pot.

More money AND more stoners.

I’m investing in Taco Bell, stat.

ProfShadow on January 20, 2014 at 6:58 AM