Pay issue certain to stoke debate on income inequality

Hiking the hourly wage for future federal contracts, as President Barack Obama proposed Tuesday, may have a limited impact in Washington, where the minimum wage is already the highest in the nation.

Nonetheless, the president’s decision to require janitors, cafeteria workers and others toiling for federal contractors be paid at least $10.10 an hour is certain to heat up the partisan debate on the inequality of incomes between rich and poor.

Democrats said the pay hike will benefit businesses and help families avoid falling into poverty.

“If you raise the minimum wage, they’ll spend it and it will move through the economy,” said state Rep. Mike Sells, D-Everett, chairman of the House Labor and Commerce Committee.

While it may only affect a small number of workers, he said, “It’s the symbolism of it, more than anything else, to have the president stand up and say (income inequality) is a problem, a huge problem.”

Republicans said the president’s edict will cause more economic harm than help.

“Raising the minimum wage will not grow jobs. What it does is have a stifling effect on job creators,” said state Sen. Barbara Bailey, R-Oak Harbor. “If you don’t have job creators you won’t have what people really need to get out of poverty, and that is a job.”

Obama spoke at length about decreasing economic inequality by increasing opportunities through education, job opportunity, higher wages and retirement plans.

He laid out a reasonable approach without resorting to the rhetoric of class warfare, said Robert Plotnick, a professor at the Daniel J. Evans School of Public Affairs at the University of Washington, and an affiliate of the West Coast Poverty Center.

“I thought he’d say a little more about (inequality) than he did. But it’s all there,” said Plotnick, an economist. “Folks on the left are going to feel a bit let down because he didn’t make a dramatic call.”

Democratic Congresswoman Suzan DelBene of Medina, whose district includes part of Snohomish County, is glad he didn’t.

“It is less about rhetoric and more about results and what are we going to do to actually move things forward and get results,” she said.

Obama’s directive on the federal pay standard won’t affect most of the nation’s minimum-wage workers because it will apply only to new or renewed federal contracts.

It is unclear how many people in Washington might benefit from the president’s proposal, as there is no database that show how many people employed under federal contracts earn less than the level sought by the president.

The impact will likely be minimal in Washington, because these workers already must be paid at least the state’s minimum wage which, at $9.32 an hour, is the highest in the nation.

In addition, federal law requires contractors and subcontractors to pay prevailing wages to those performing services on covered federal contracts, which in many cases in Washington may be more than $10.10 an hour, state and federal labor officials acknowledged.

Democratic Congressman Rick Larsen of Everett said Obama’s executive action “is a welcome start which will hopefully encourage private companies to follow suit.”

He echoed Obama’s call for Congress to pass a bill to hike the federal standard from the current $7.25 an hour to $10.10.

“It is unacceptable that millions of people are working full-time at the minimum wage but still living in poverty,” Larsen, a co-sponsor of the bill, said in a statement.

Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com.

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