President Obama To Sign Minimum Wage Order

President Obama will sign an order Wednesday that requires businesses with government contracts to pay their workers a minimum wage of $10.10 per hour starting in 2015. It will apply to those with new or renewed federal contracts and raises the minimum wage for these businesses from the current federal minimum $7.25 per hour.

The federal contract requirement was pushed by Democrats who feared that lawmakers would not move quickly to raise the minimum wage to $10.10 for all workers, not just those working for businesses with federal contracts.

The order will affect less than 500,000 workers, but the hope is to spur Congress to mandate an increase in the minimum wage for all American workers. Advocates of the move say it will have positive effects including an increase in productivity, lower turnover, and that it can help lift working families out of poverty.

Tipped workers employed by businesses with federal contracts would also benefit. Currently workers who receive tips are paid a required minimum base of $2.13 an hour. The order would raise that base to $4.90 and increase it by 95 cents a year until it reaches 70% of the regular minimum wage. If a worker's tips on top of that don't add up to $10.10 an hour, the federal contractor will be required to make up the difference.