In advance of the State of the Union address, President Barack Obama announced an increase in the minimum wage for federal contract workers to $10.10, through executive order.
The announcement comes as a larger push by the administration to increase the federal minimum wage to $10.10 as well, according to a statement released by the White House.
The White House expressed its intention to work with Congress to pass the Harkin-Miller bill to make a new federal minimum wage a reality.
The current minimum wage is $7.25 an hour.
The executive order only pertains to new contracts picked up by the government.
“Boosting wages will lower turnover and increase morale, and will lead to higher productivity overall,” the release said. “Raising wages for those at the bottom will improve the quality and efficiency of services provided to the government.”
Conservative groups are up in arms about the change.
“Raising the minimum wage to $10.10 per hour by 2016 would lead to 217,000 fewer jobs per year and $30 billion lower gross domestic product per year,” said a blog post from the Heritage Foundation.
Conversely, progressive organizations are lauding the decision.
“Raising the minimum wage for federal contract employees shows strong leadership from the president in expanding opportunity for more Americans to move up the economic ladder,” said a release by the Center for American Progress. “It will put more money in the pockets of hardworking Americans, who will spend it in their communities and help drive our economic growth.”
The executive order will also increase the minimum wage for tipped workers for the first time in more than 20 years.