Seeking to shore up his plummeting public approval ratings, President Barack Obama plans to use his executive powers to increase the minimum wage for American workers to USD 10.10 per hour for federal contracts, the White House said.
Obama plans to announce his decision in this regard during his annual State of the Union Address to the Congress tonight, the White House said, adding the president would continue to press Congress on the issue.
"In the State of the Union Address, the President will announce that he will use his executive authority to raise the minimum wage to USD 10.10 for those working on new federal contracts for services," a White House fact sheet said.
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The current federal minimum wage is USD 7.25 per hour, and hasn't been raised since July 2009.
In the sixth year of his presidency, public opinion polls put Obama's approval ratings in the low 40s, dramatically down from a year ago. He's taken a big hit over the dismal start of his signature 'Obamacare' health care programme, which has energised the opposition.
An increase in the minimum wage will lower turnover and increase morale, and will lead to higher productivity overall. Raising wages for those at the bottom will improve the quality and efficiency of services provided to the government, the White House said.
"The President is using his executive authority to lead by example, and will continue to work with Congress to finish the job for all Americans by passing the Harkin-Miller bill."
"The bill would raise the federal minimum wage for working Americans in stages to USD 10.10 and index it to inflation thereafter, while also raising the minimum wage for tipped workers for the first time in over 20 years," the fact sheet said.
It has been seven years since Congress last acted to increase the minimum wage and, adjusted for inflation, today the real value of minimum wage is roughly the same as what it was in the 1950s, despite the fact that the typical American family's income has doubled since then, it said.
"And right now a full-time minimum wage worker makes USD 14,500 a year, which leaves too many families struggling to make ends meet. Even after accounting for programs like the Earned Income Tax Credit, a family of four supported by a minimum wage worker still ends up living below the poverty line," the White House said.
Since it was first established in 1938, the minimum wage has been increased 22 times, but was eroded substantially over several prolonged periods because of inflation, it said.
Democrats and Republicans agree that indexing the minimum wage to inflation would ensure that working families can keep up with expenses and will not suffer if Congress fails to act.
Indexing would prevent a repeat of the 34 per cent decline in the real value of the minimum wage from 1978 to 1989 and the 19 per cent decline in real value from 1998 to 2006, the White House said.
