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Minimum Wage Hike: What You Need to Know

President Obama recently issued an executive order raising the minimum wage for federal contract workers to $10.10 per hour. But how the rise actually work, and who'll be affected by the move?

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, goes through the details of the minimum-wage increase. Dan notes that the move will take effect for new contracts in 2015, leaving time for contractors to anticipate the changes. He also points out that the move won't necessarily affect a huge percentage of federal contract workers, as major contractors Boeing (NYSE: BA  ) , Lockheed Martin (NYSE: LMT  ) , and Northrop Grumman (NYSE: NOC  ) have large numbers of highly paid workers that do federal contract work. Still, Dan concludes that the wage increase will be an interesting experiment on a much-debated economic issue affecting labor relations.

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Read/Post Comments (6) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 01, 2014, at 11:11 PM, JePonce wrote:

    If it does not effect anyone, and does not take effect until 2015, it can only be pre-election rhetoric, creating the illusion he cares in exchange for votes.

    What else could it be?

  • Report this Comment On February 02, 2014, at 12:15 PM, sogole wrote:

    We wiil all pay higher taxes.

  • Report this Comment On February 02, 2014, at 1:01 PM, Cody700 wrote:

    Government is never the answer here. Throughout history there has never been a successful society with so much government. We are circling the drain folks.

  • Report this Comment On February 02, 2014, at 2:27 PM, montty555 wrote:

    federal contractors work on prevailing wage.this helps no one.

  • Report this Comment On February 02, 2014, at 2:56 PM, Artie wrote:

    Over 97% of federal contract workers already make more than $10.10/hr. The overall effect will be so minimal as to be unnoticeable, other than to perhaps eventually hurt the ability of smaller business to compete for contracts against larger firms. It's just more electioneering and vote-buying with somebody-else's-money.

  • Report this Comment On February 02, 2014, at 10:37 PM, kennyhobo wrote:

    What federal contractor pays minimum wage? I'd really l like to know. Everyone knows that you make big bucks from the government and charge high rates. Big Government screws the people with these contracts.

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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