Legal Cloud Hangs Over President Obama's Illegal Minimum Wage Hike

Posted: Jan 28, 2014 12:25 PM
Legal Cloud Hangs Over President Obama's Illegal Minimum Wage Hike

President Obama will announce tonight that he is signing an Executive Order mandating a new $10.10 minimum wage for all future federal contract workers. But it is not at all clear that he has the legal authority to do so.

"My understanding is that they are using the president's authority under the Federal Property and Administrative Services Act of 1949," George Washington Law School's Associate Dean for Government Procurement Law Studies Dan Gordon told Townhall. "And that calls for measures which ensure 'economy and efficiency' of the procurement process. And I am not sure whether this blanket increase in the wages paid by contractors can be fit within that legal framework."

"Now it is certainly true that if you had a particular contract," Gordon explained, "let's suppose you were running a call center for the IRS in Topeka, Kansas, and you had a history of contractors at that call center who were paying their people the legal minimum and the result was significant staff turnover which was causing disruption, then you clearly could say, 'You know what, in the next procurement we're going to require that the contractor pay higher wages because higher wages are necessary to avoid disruption cause by turnover.' But as a blanket matter I think that there is a legal cloud over whether raising the amount that contractors pay serves 'economy and efficiency.'"

Without establishing a factual record that an increased minimum wage is necessary to ensure the "economy and efficiency" of government procurement, Obama's unilateral move to do so stands on shaky legal ground.

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But it is not at all certain that anybody would sue to stop the hike. A federal contractor who could prove they had been put at a competitive disadvantage, as compared to other potential contractors, by Obama's unilateral wage hike, could show they were economically harmed enough to establish standing and sue in federal court. But considering how few workers will get raises, just 250,000 according to the Economic Policy Institute, it's possible no one would challenge Obama.

Whether or not Obama's unilateral minimum wage hike is ever challenged in court, it is just the latest example of Obama's long-track record of ignoring Congress and the Constitution and instead governing without legal authority.