There is an ongoing national debate around the Obama Administration’s legislation to increase the minimum wage. Since 2009, the federal minimum wage has remained at $7.25 an hour. Economist estimate the minimum wage should be at least $10 dollars an hour to keep pace with the current cost of living. The Fair Labor Standards Act of 1938 established the first federal minimum wage. Since the law was passed, there has been an ongoing debate on the pros and cons of a minimum wage increases. The dominant argument against increasing the minimum wage is that minimum wage increases destroy jobs and the dominant argument in support of minimum wage increases is minimum wage increases provide low income workers with higher incomes necessary to offset cost of living increases. There are a myriad of empirical economic studies that support the pro and con views of the impact of increasing the minimum wage. Some of the controversial debate on increasing the minimum wage is captured in the March 2013, New York Times article, “The Business of the Minimum Wage.” As the ongoing historical debate on the pros and cons of increasing the minimum wage continues:
“On February 12, 2014, President Obama signed Executive Order 13658, “Establishing a Minimum Wage for Contractors,” to raise the minimum wage to $10.10 for all workers on Federal construction and service contracts. The President took this executive action because boosting wages lowers turnover and increases morale, and will lead to higher productivity overall. Raising wages will improve the quality and efficiency of services provided to the government. The Executive Order directed the Department of Labor to issue regulations to implement the new Federal contractor minimum wage.
The Department today announced that it will publish a Final Rule implementing the provisions of Executive Order 13658.
Key provisions of the final rule include:
• It defines key terms used in the Executive Order, including contracts, contract-like instruments, and concessions contracts.
• It provides guidance for contractors on their obligations under the Executive Order.
• It establishes an enforcement process that should be familiar to most government contractors and will protect the right of workers to receive the new $10.10 minimum wage.
• It confirms that approximately 200,000 workers will benefit from the Executive Order.
Executive Order 13658 applies to new contracts and replacements for expiring contracts with the Federal Government that result from solicitations issued on or after January 1, 2015 or to contracts that are awarded outside the solicitation process on or after January 1, 2015.’