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Wednesday, January 29, 2014 - 12:36am
El Paso, Texas (KDBC) — The minimum wage will jump for "some" federal workers.
President Obama announced he's raising the minimum wage for "new" federal contract workers to $10.10 an hour. He'll sign an executive order authorizing the increase from $7.25. It will only apply to future contracts, not existing ones.
The president's plan to raise the minimum wage for federal contract workers has some Borderland residents concerned.
Gerardo Licon owns a construction and engineering company that does contract work for the federal government at places like Fort Bliss. He says raising the minimum wage will create a big ripple effect. Unskilled minimum wage earners will suddenly be paid the same as other, more qualified skilled workers.
That means their pay will also need to be adjusted accordingly, forcing some companies to cut employees.
"It's a serious domino effect in every way you look at it. I think for some small businesses it's going to be disastrous. For the government itself and some agencies it's certainly going to be a challenge," said Licon.
Licon also says many agencies already have a budget established for this fiscal year, compounding the problem.