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Thursday, January 20, 2022

Biden to give federal contract workers $15 minimum wage, while Congress leaves millions in the lurch

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The current $10.95 an hour comes out of a similar executive order by former President Barack Obama, which raised the federal contractor minimum wage to $10.10 an hour and indexed it to inflation.

The workers affected, according to the White House, include cleaning professionals, maintenance workers, nursing assistants at veterans facilities, cafeteria and other food service workers, and laborers. There’s no exact number known yet, but the White House describes it as “hundreds of thousands.” That’s in contrast to the 32 million who would get a raise if Congress raised the federal minimum wage to $15 in steps between now and 2025.

Delaware is the latest state considering a $15 minimum wage. Such a bill passed a state House committee and is moving forward. Currently, 29 states and Washington, D.C., have minimum wages above the federal level, with the District at $15 already and California, New Jersey, Connecticut, Massachusetts, Illinois, Maryland, and Florida on their way—Florida voters having approved a $15 minimum wage measure in November 2020. New York has a $15 minimum wage in the New York City area, while the rest of the state has a minimum wage indexed to inflation until it reaches $15.

A White House fact sheet on Biden’s move to raise the minimum wage for federal contract workers makes the case that, in addition to raising wages for hundreds of thousands of workers and benefitting women and people of color, it will be cost-effective: “It will reduce turnover, allowing employers to retain top talent and lower the costs associated with recruitment and training. It will reduce absenteeism, a change that has been linked to higher productivity, not just by the employees who are more present, but by their co-workers, too. And, it will reduce supervisory costs. One recent study focusing on warehouse workers and customer service representatives at an online retailer found that raising hourly wages by $1 yields a return of approximately $1.50 through increased productivity and reduced costs.”

Though let’s be clear: Doing the right thing should be enough. 

The fight continues in Congress for a minimum wage increase, with Manchin, Sinema, and all the Republicans ruling it out for spurious reasons. Most of the “compromises” regularly floated by people who really just want to keep the minimum wage low don’t hold up, and in some cases have troubling histories of exactly the racist kind you’re probably imagining. This is definitely not over. Biden’s federal contract worker executive order has to be understood as (and pressured to be) a statement of intent and commitment: a down payment, not a consolation prize.


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