WASHINGTON – President Barack Obama lacks congressional support to raise wages or end gender pay disparities. But he is still able to impose his policies on federal contractors, in keeping with presidents’ tradition of exerting their powers on the fraction of the economy they directly control.
Obama will sign an executive order Tuesday barring federal contractors from retaliating against employees who discuss their pay with each other. The order is similar to language in a Senate bill aimed at closing a pay gap between men and women. That bill is scheduled for a vote this week but is unlikely to pass.
The president also will direct the Labor Department to adopt rules requiring federal contractors to provide compensation data based on sex and race.
He plans to sign the two executive orders during an event at the White House, where he will be joined by Lilly Ledbetter, a female worker whose name appears on a pay discrimination law Obama signed in 2009.
The moves showcase Obama’s efforts to seek action without congressional approval and demonstrate that even without legislation, the president can drive economic policy. At the same time, they show the limits of his ambition when he doesn’t have the support of Congress for his initiatives.
Republicans say Obama is pushing his executive powers too far and should do more to work with Congress. His new executive orders are sure to lead to criticism that he is placing an undue burden on companies and increasing their costs.
Federal contracting covers about one-quarter of the U.S. workforce and includes companies ranging from Boeing to small parts suppliers and service providers. As a result, presidential directives can have a wide and direct impact. Such actions also can spur action in the broader economy.
“This really is about giving people access to more information both to help them make decisions at the policy level but also for individuals,” said Heather Boushey, executive director and chief economist at the Washington Center for Equitable Growth. She has been working with the administration to get compensation information about the nation’s workforce.
Federal contractors, however, worry that additional compensation data could be used to fuel wage related lawsuits, said James Plunkett, director of labor policy at the U.S. Chamber of Commerce.
What is more, he said, such orders create a two-tiered system where rules apply to federal contractors but not to other employers. Those contractors, knowing that their business relies on the government, are less likely to put up a fight, he said.
In a separate action Monday, Obama planned to announce 24 schools that will share more than $100 million in grants to redesign themselves to better prepare high school students for college or for careers.
The awards are part of an order Obama signed last year. Money for the program comes from fees that companies pay for visas to hire foreign workers for specialized jobs.
Obama has declared this a year of action, whether Congress supports him or not.
In February, he signed an executive order increasing the hourly minimum wage for federal contractors from $7.25 per to $10.10. While White House officials estimated such an increase would affect only a small percentage of federal contract workers, they said the move could encourage states or individual businesses to act on their own to increase workers’ wages at a time legislation to raise the minimum wage remains stalled in Congress.
Obama has also pushed his workplace initiatives beyond just federal contractors where possible.
Last month he instructed the Labor Department to come up with new workplace overtime rules for all employers, a power the administration has under the Fair Labor Standards Act.
But presidents have most direct power over the workforce that is paid with taxpayers’ money.
Obama’s go-it-alone strategy is hardly new.
The most enduring anti-discrimination laws in the American workplace began with an executive order signed by President Franklin Roosevelt on June 25, 1941, outlawing discrimination based on race, color, creed and national origin in the federal government and defense industries.
President John F. Kennedy broadened that in 1961 with an order that required government contractors to take affirmative action to ensure hiring people “without regard to their race, creed, color or national origin.”
President George W. Bush also acted on his own when he ordered federal contractors to ensure that their workers were in the country legally by requiring the use of an electronic employment-verification system.
Jeffrey Hirsch, a former lawyer with the National Labor Relations Board, said presidential executive orders that affect federal contracting workforces can over time demonstrate that those practices are less onerous than initially imagined.
“It’s an important step in implementing things in a broader scale,” said Hirsch.