Some 3.6 million workers were paid the federal minimum wage in 2012. By comparison, only 560,000 are employed as federal contractors for $12 an hour or less, according to the think tank Demos. And Obama's executive order only affects new and renewed contracts.
Obama spent a sizable part of his speech hammering away at issues that have long been debated but remain stalled, like closing the U.S. military prison at Guantanamo Bay, Cuba.
He renewed an appeal for Congress to give him the authority to speedily negotiate international trade agreements, a proposal held up by Democratic opposition.
(Watch more: NBC/WSJ poll: Obama approval rating at 43%)
And on one of his biggest priorities, immigration reform, Obama urged Congress to work together on an overhaul. He tempered his criticism of Republicans who have held up the legislation, with signs of possible progress emerging in recent days among House Republicans.
Obama stopped short of taking a step that immigration reform advocates have called on him to take. He did not take executive action to freeze the deportations of parents of children brought to the United States illegally.
"Let's get immigration reform done this year," he said.
'Refighting old battles'
On healthcare, the issue that rocked his presidency and caused many Americans to lose confidence in him, Obama defended the overhaul law he signed in 2010 but did not dwell on it, urging Americans to sign up for medical insurance coverage by a March 31 deadline.
"I don't expect to convince my Republican friends on the merits of this law," Obama said. "But I know that the American people aren't interested in refighting old battles."
He said nothing about whether he would approve the long-delayed Keystone XL Canada-to-Texas oil pipeline that environmentalists oppose.
Instead, Obama spoke passionately about the need to tackle climate change, a statement that could foreshadow more executive actions to reduce carbon emissions this year.
Obama said, "The shift to a cleaner energy economy won't happen overnight, and it will require some tough choices along the way. But the debate is settled. Climate change is a fact."
Republicans clambered for some of the same rhetorical ground as Obama in pledging to narrow the gap between rich and poor but staked out a different vision for doing so.
U.S. Representative Cathy McMorris Rodgers, chairwoman of the House Republican Caucus, said in her party's official response to Obama's speech that Republicans want to rely on free markets and trust people to make their own decisions, not have the government make decisions for them.
"The president talks a lot about income inequality, but the real gap we face today is one of opportunity inequality," she said, videotaped seated on a couch in a living room setting.
(Read more: Obama to visit Costco, steel plant after address)
With three years left in office, Obama is trying to recover from a difficult past year in office, when immigration and gun control legislation failed to advance in Congress and the rollout of the key provisions of his healthcare law stumbled.
Polls reflect a dissatisfied and gloomy country. An NBC News/Wall Street Journal poll released on Tuesday showed 68 percent of Americans saying the country is either stagnant or worse off since Obama took office. People used words like "divided," "troubled" and "deteriorating" to describe the state of the country, the poll showed.
Obama dwelled mostly on domestic issues in his hour-long address, but warned Congress he would veto any effort to increase economic sanctions on Iran as he tries to reach a comprehensive deal with Tehran to ensure it does not obtain a nuclear weapons capability.
A CNN poll found that 44 percent of respondents viewed Obama's address very positively while 32 percent felt somewhat positively about it and 22 percent were negative toward it.
Obama will talk up the economic themes from the speech in a two-day road trip starting on Wednesday that will include stops in Maryland, Pennsylvania, Wisconsin and Tennessee.