By Diane Stafford
Kansas City Star, Jan 28, 2014
... Just hours before his annual State of the Union address, in which he once again called on Congress to raise the $7.25-an-hour federal minimum wage for all workers, [President] Obama exercised his presidential ability to set a higher minimum wage for federally contracted employees. The order affects a small number of such workers — probably fewer than half a million low-paid workers such as food service, laundry and janitorial workers nationwide. ...
The order doesn’t include the federal government’s own workers and won’t take effect until 2015. It will apply only at the start of new federal contracts or when contracts are renegotiated with new conditions. It does not affect workers on existing contracts. ... An estimated 2 million workers are employed by federal contractors, and a large majority already earn more than $10.10 an hour. But in some federal contract jobs, wages are low. A survey last year by the National Employment Law Project of contractors who make military uniforms, do janitorial and food service work, and transport goods found that three-fourths of those workers made less than $10 an hour.
... Legislation sponsored by Sen. Tom Harkin, an Iowa Democrat, and Rep. George Miller, a California Democrat, would raise the federal minimum for all workers to $10.10 in 2015 and index it to inflation. ...
[A] rising number of economists and even business owners are behind stepped increases in the minimum wage.
In south Kansas City, it could mean more pizzas sold at Waldo Pizza. At least that’s partly why owner Phil Bourne added his name to a “Business for a Fair Minimum Wage” statement signed by business owners around the country.
“Workers need to earn enough to buy the products or service that businesses are selling,” Bourne said Tuesday.
Bourne counts himself among business owners and economists who believe it’s more harmful for wages to fall behind the inflation rate than it is for the government to set mandatory wage floors.
The cumulative inflation rate since the last minimum wage increase in 2009 is 8.6 percent. A restaurant meal that cost $20.00 in 2009 would cost $21.72 today, according to that calculation.
Bourne said he’s OK with “gradual, planned increases that give business owners a chance to incorporate the change into their operations and pricing. Nobody has to just suddenly lay people off or cut hours. Nobody needs to do that if the demand is there for your product or service.” ...
Craig Jelinek, president and chief executive at Costco, is among business owners backing higher entry-level wages. He said his company pays a minimum of $11.50 an hour in all states where the discount store does business.
“Instead of minimizing wages, we know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty,” Jelinek said. ...
The New York Times contributed to this report. To reach Diane Stafford, call 816-234-4359 or send email to stafford@kcstar.com.
Copyright 2014 Kansas City Star and wire service sources.