Obama was met with resounding applause at a major union rally and breakfast in Boston when he said he had signed the executive order aboard Air Force One as he flew in to mark the US holiday of Labor Day. He said Republicans who claim the mantle of middle-class protectors are talking big, but they "have to walk the walk."
"You just wait, you look up at the sky and prosperity will come raining down on us from the top of whatever high-rise in New York City," he said sarcastically. "But that's not how the economy works." He added that the Republican mindset has been "wrecking the economy for a long, long time."
The Labor Day gesture to workers' groups came as Obama works to smooth over tensions over his trade agenda with the labor movement, an important Democratic constituency.
Major unions are opposing Obama's push for sweeping new trade deals with Asia and Europe, with some threatening to work against Democrats who voted to support those talks in Congress. Unions have warned that the deals could lead to the widespread job elimination.
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Under the executive order, employees working on federal contracts gain the right to a minimum of one hour of paid leave for every 30 hours they work. Stretched out over 12 months, that's up to seven days per year.
The order will allow employees to use the leave to care for sick relatives as well, and will affect contracts starting in 2017 just as Obama leaves office.
But the White House wouldn't specify the cost to federal contractors to implement the executive order. The Labor Department said any costs would be offset by savings that contractors would see as a result of lower attrition rates and increased worker loyalty, but produced nothing to back that up.