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Obama signs executive order raises federal minimum wage urges Congress to follow

Keeping true to his promise President Barack Obama signed an executive order on Wednesday afternoon, Feb. 12, 2014 raising the minimum wage for new contracts for federal workers from $7.25 where it has been since 2009 to $10.10 at an event in the White House's East Room where he was surrounded by workers who would benefit from a raise in the minimum wage. During his remarks the President urged Congress to follow suit raise the minimum wage for all workers. The President's initiative seems more ceremonial than much else since only approximately 2 million workers will benefit and it will only start to take effect on Jan. 1, 2015 and only for new and replacement contracts.

President Barack Obama signs an executive order raising the minimum wage for federal contract workers to $10.10, Feb. 12, 2014; Obama is urging Congress to follow him and do the same for all American workers
Alex Wong/GETTY

Despite the President's token move he still believes Congress is key to lifting Americans above the poverty line. According to the White House and President Obama in his remarks when inflation and cost of living is considered the minimum wage "in real terms is worth about 20 percent less than it was when Ronald Reagan took office -- 20 percent less, a fifth less."

Quoting the new Council of Economic Advisers report, the White House claims that poverty rates remain the same in the country as they were in the 1960s, and suggested expansion to the Earned Income Tax Credit, the child tax credit, Supplemental Nutrition Assistance Program, unemployment benefits extension and most importantly raising the minimum wage to curb the poverty rates. The Council of Economic Advisers estimates that when that is done a total of 28 million Americans will benefit.

At the White House event and before signing the executive order President Obama delivered some remarks about his economic opportunity program and his efforts to pass legislation through executive orders to move his economic program forward when Congress refuses or takes too long to act. Although Obama again repeated "I'm eager to work with Congress whenever I can… but wherever I can act on my own, without Congress… that's what I'm going to do."

Obama listed the ways the he already acted himself since making this promise in his State of the Union Address, where he declared "this year would be a year of action." The President said he has already created "MyRA" "for Americans to start saving for retirement"; ConnectED with the help of "America's biggest high-tech companies" to make "sure that all of our kids have access to high-speed Internet and up-to-date technology in their classroom," and he signed a memorandum making sure that there would not be any prejudice against the long-term unemployed applying for federal jobs and "brought together business leaders who are committed to hiring more unemployed Americans."

The President again described that the economic opportunity program has four parts, creating jobs in "manufacturing, and exports, and energy, and innovation", technical job training programs, education initiatives from Pre-K to college, and raising the minimum wage. After which the President delved into discussing his executive order to raise the minimum wage, and the impact it will have on federal workers by reducing turnover, raising morale and productivity, which was complete with anecdotes and examples including his stop at the Costco in Landham, Maryland on Jan. 29 during his economic opportunity tour.

President Obama reminded Congress; "And let's not forget -- not only is it good for the economy, it's the right thing to do. There's a simple moral principle at stake -- if you take responsibility and you work as hard as these folks work, if you work full-time, you shouldn't be living in poverty. Not in America. We believe that."

The President then announced that since Congress has not acted in the year since he first asked them to raise the minimum wage in his 2013 State of the Union Address which cost Americans $200 in wages, he is taking his own action; "And as America's chief executive… So while Congress decides what it's going to do -- and I hope this year, and I'm going to work this year and urge this year that they actually pass a law -- today, I'm going to do what I can to help raise working Americans' wages. So today, I'm issuing an executive order requiring federal contractors to pay their employees a fair wage of at least $10.10 an hour -- $10.10 an hour."

President Obama promised that he will continue throughout the year to urge Congress to pass legislation raising the minimum wage for the rest of the country. The President explained; "There's a bill right now in front of both the House and the Senate that would boost America's minimum wage to $10.10 an hour -- just like I'm doing with this executive action…. its effect would lift wages for about 28 million Americans… It would help millions more work their way out of poverty -- without requiring a single dollar in new taxes or spending. It's the right thing to do."

At the same time he urged Congress to raise the minimum wage he asked them to extend unemployment insurance benefits, the bill has stalled in the Senate, repeating failing to pass procedural hurdle. The benefits expired for 1.3 million American on Dec. 28, 2013 and each week an additional 70,000 lose benefits. The President starkly stated; "So members of Congress have a pretty clear choice to make right now: Raise our workers' wages, grow our economy -- or let wages stagnate further, and give workers what amounts to another pay cut this year. Restore unemployment insurance for Americans still looking for that job -- or expose them further to hardship."

The President using humor also advocated that the American public should also pressure their elected officials in Congress to raise the minimum wage, stating; "Every American deserves to know where your elected representative stands on this issue. So ask your senator, ask you representative in the House: Do you support raising the federal minimum wage to $10.10 an hour? If they say yes, tell them good job…. If they say no, you know, be polite… say, well, why not? Ask them to reconsider siding with an overwhelming majority of Americans."

The President concluded his remarks using the tag lines from his State of the Union address for his economic program, stating; "We've got to create new jobs, strengthen the middle class, build new ladders of opportunity for folks working their way into the middle class -- just like these folks are doing right here…..There are folks out there who want to see us restore an economy that works for everybody, and get back to our founding vision of opportunity for all."

The President's plan for increasing the minimum wage according the White House has "three steps" raising the minimum wage initially to $10.10, raise tax credits, and have legislation indexing the minimum wage so it will automatically be raised to meet inflation and the rise in cost of living.

The executive order President Obama signed also raises the minimum wage for tipped workers from $2.13 an hour to $4.90, with a raise each year of 95 cents until as the White House Fact Sheet explains; "it reaches 70 percent of the regular minimum wage" and if it the tips do not cover the regular minimum wage, "the employer will be required to pay the difference."

The executive order also ensures that all contract workers with disabilities are all guaranteed the new minimum wage and cannot be paid less effectively obliterating a 1938 law where as USA Today explained "employers could pay certain disabled workers subminimum wages." As the President declared; "This principle doesn't apply to some of us. It applies to all of us."

In all according to the White House Fact Sheet the executive order will increase wages for "nursing assistants providing care to our veterans at nursing homes, concessions workers in National Parks, people serving food to our troops, and individuals with disabilities working to maintain the grounds on military bases."

President Obama introduced raising the minimum wage in his State of the Union Address on Tuesday, Jan. 28, 2014 by stating; "To every mayor, governor and state legislator in America, I say, you don't have to wait for Congress to act; Americans will support you if you take this on. And as a chief executive, I intend to lead by example. Profitable corporations like Costco see higher wages as the smart way to boost productivity and reduce turnover. We should too. In the coming weeks, I will issue an executive order requiring federal contractors to pay their federally-funded employees a fair wage of at least $10.10 an hour - because if you cook our troops' meals or wash their dishes, you shouldn't have to live in poverty."

Then on Wednesday, Jan. 29 President Obama spoke at the Costco store in Lanham, Maryland on the first stop of his post-State of the Union economic opportunity tour about equal pay for work which particularly applies to women and raising the minimum wage. Obama also announced that he will sign an executive order raising the minimum wage for federal contract workers from $7.25 to $10.10. The President explained how important a minimum wage to all Americans; "Americans overwhelmingly agree nobody who works full time should ever have to raise a family in poverty. And that is why I firmly believe it's time to give America a raise."

The President declared he is going to take the initiative without Congress, saying; "While Congress decides whether it's going to raise the minimum wage or not, people outside of Washington are not waiting for Congress, and I'm not either. As the chief executive, I'm going to lead by example…. [I]f you cook our troops' meals, wash their dishes, you shouldn't have to live in poverty." Still the President needs Congress "to catch up to the rest of the country on this" and he urged them to "Give America a raise."

Senate Majority Leader Harry Reid, D-NV has promised the President that he will put raising the minimum wage to a vote in March. The bill proposed to raise the minimum wage was sponsored by two Democrats, Iowa Senator Tom Harkin and California Representative George Miller. The bill would face opposition in the Republican House of Representative from the Speaker John Boehner, R-OH who has numerous times stated that raising the minimum wage will result in less jobs for the lower income bracket. Despite lack of Congressional support the public including Republicans support raising the minimum wage, a Jan. 8 Quinnipiac University poll "found 71 percent of Americans, including 52 percent of Republicans" want the minimum wage raised.

Americans and Congress need to only look to their neighbors up north in Canada to see how behind they are in their minimum wage levels, and a raise to $10.10 would still be subpar. The province of Quebec just announced they will raise their minimum wage from $10.15 to $10.35 on May 1, 2014 and $8.70 to $8.90 for tipped workers. While in the Ontario the minimum wage will hit $11 from $10.25 on June 1 making it the highest minimum wage in Canada and on the continent, with Alberta at $9.95 being Canada's lowest rate, all putting the U.S. to shame.


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