Obama to Bypass Congress and Give Workers Better Pay
Back in January, President Barack Obama spoke to Congress in the State of the Union Address with rhetoric akin to an ultimatum; do these things, or I will do them on my end the best I can, and ask others to skip over you. “I intend to lead by example,” said Obama. “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.” He encouraged state government and legislators to do the same, not to wait for Congress, and added that, “Congress needs to get on board.” In February, Obama followed through on his original promise when it came to a minimum wage increase for federal contract workers, issuing an executive order to establish a “minimum wage for Federal contractors and subcontractors … [at] $10.10 per hour beginning January 1, 2015.” There was also a clause for tipped workers wages, which would be given at least $4.90 an hour on the same schedule.
Now, Obama is looking to take another step of his own to up pay for millions more, as he threatened in the past should Congress not get on board. According to the New York Times, those affected will include those fast food managers, loan officers, and computer technicians that are considered “executive or professional.” He will be ordering the Labor Department on Thursday to require overtime pay for these types of employees, a move that will likely bring criticism from opponents in Washington. “There’s no such thing as a free lunch. If they push through something to make a certain class of workers more expensive, something will happen to adjust,” said Daniel Mitchell, senior fellow at the Cato Institute, to the New York Times. Mitchell noted that with a forced change such as that, it’s quite possible that employers might cut pay, or even workers, if need be.
Cecilia Munoz, director of the White House Domestic Policy Council, spoke to the New York Times on the matter, emphasizing the purpose behind the push. “We need to fix the system so folks working hard are getting compensated fairly. That’s why we are jump-starting this effort,” said Munoz. Ross Eisenbrey, vice president of the Economic Policy Institute, agrees, according to the Times, saying that, “Under current rules, it literally means that you can spend 95 percent of the time sweeping floors and stocking shelves, and if you’re responsible for supervising people 5 percent of the time, you can then be considered executive and be exempt.”
Others, though in favor of wage change, are concerned about possible unintended side effects to a forced adjustment such as this. Republicans in Congress have been particularly vocal about the negative impacts it could have. Leaders in the party have been especially serious about a Congressional Budget Office Report, which stated that with an increase to $10.10 for minimum wage, it would be likely that 500,000 workers might lose their jobs.
“We know beyond dispute that raising the minimum wage will destroy jobs for peole who need them the most. When folks are still struggling to find work in this economy, why would we make that any harder?” asked Brendan Buck, the spokesperson for Speaker of the House John Boehner (R-Ohio), according to the Washington Post.
More From Wall St. Cheat Sheet:
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Follow Anthea Mitchell @AntheaWSCS