He also proposed other new measures to help poorer citizens, including a new “starter” retirement savings plan that will have government backing and broader tax credits for low-income families.
In addition, he called on Congress to reinstate unemployment support payments for some 1.6 million jobless Americans that were cut off at the beginning of the year as part of a budget deal.
The move to bring higher wages to workers on government contract jobs garnered measured support from liberal groups hoping it is a first step to a broader increase in the minimum.
The Economic Policy Institute has estimated that one in five contract workers are “working for poverty wages”.
“Requiring federal contractors to pay employees at least $10.10 per hour is a good first step… 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,” said the EPI’s Vice President Ross Eisenbrey.
Tsedeye Gebreselassie, a staff attorney at the National Employment Law Project, called the move “in general a really positive step.”
“Workers will almost always be net better-off due to increased wages,” she told AFP, although she added that $10.10 an hour “is still not a livable wage.”
Businesses though were divided.
Cris Young , President of the American Small Business Chamber of Commerce, whose 500,000 members are mostly involved in government contracting, said the step would benefit them.
“As small businesses, we often have to pay our employees better than a living wage,” she said, while larger contractors get away with low pay.
“If everyone is paying $10.10, then the playing field is more level.”
But the US Chamber of Commerce said raising the minimum wage in general just increases costs for American companies and forces them to cut back on job creation.
“A very large increase in the minimum wage destroys a very large number of jobs; a large increase destroys a large number of jobs,” said the Chamber’s deputy chief economist, J.D. Foster.
“A higher minimum wage for workers on federal contracts just gets passed on to the federal government – the taxpayers – in higher costs.”
About The Author
