President Joe Biden will sign an executive order Tuesday raising the minimum wage to $15 for federal contractors, delivering for hundreds of thousands of workers what he was unable to do on a broader basis because of pushback from Republicans and some Democrats on Capitol Hill.
The order will require federal agencies to incorporate a $15 minimum wage in all contract solicitations starting Jan. 30, 2022. By March 30 of next year, agencies will have to implement the higher wage in new contracts. The rule also applies to contractors exercising their right to extend existing contracts – something that often occurs annually, the Biden administration said in a statement.
"This executive order will promote economy and efficiency in federal contracting, providing value for taxpayers by enhancing worker productivity and generating higher-quality work by boosting workers' health, morale, and effort," the administration said in announcing the new rules.
"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."
Further, the administration said, the higher wage could end up saving money in supervisory costs. It cited a recent study showing that productivity rises with an hourly wage, with a $1-an-hour increase associated with a $1.50-an-hour savings.
The $15 an hour is a dramatic increase from existing rules, implemented in 2014, during the Obama administration, setting minimum wages for federal contractors at $10.10 per hour and indexed to inflation. The inflationary increases mean the current minimum for federal contractors is $10.95 an hour.
While the higher pay only applies to people working on federal contracts, it can have a ripple effect on private industry wages as companies compete with the federal government and contractors for employees. The $15-an-hour pay is especially critical for workers such as maintenance and cleaning employees, cafeteria workers, and nursing assistants caring for veterans, the administration said.
Democrats sought to raise the federal minimum wage – now $7.25 an hour – to $15 an hour, phased in over five years. Republicans and a couple of Democrats balked, saying the increase would lead to job losses and were too high for states with lower costs of living.
Senate Budget Committee Chairman Bernie Sanders, Vermont independent who caucuses with Democrats, sought to include the $15-an-hour minimum into a budget reconciliation package earlier this year – meaning Republicans could not filibuster it. But the Senate parliamentarian ruled that the wage hike could not be included in the broader budget bill.
Further, more conservative Democrats, including Sen. Joe Manchin of West Virginia and Sen. Kyrsten Sinema of Arizona, said they would oppose the $15-an-hour minimum. Manchin said he would back an $11-an-hour minimum.
The current wage is "sinfully low," Manchin told CNN's "State of the Union" last month, saying people should be assured a wage that keeps them above the poverty level. That minimum, he said, is now $11.
"We want to go and do something," Manchin told CNN. There is "not one senator out of 100 – not one – who does not want to raise the minimum wage. Once we get to $11, then it should be indexed for inflation, so it never becomes a political football again."
Manchin's Democratic colleagues believe $11 is way too low to achieve the goal Biden has espoused since his campaign days – to ensure that no one working a full-time job lives in poverty. Congress has yet to hike the minimum wage, which hasn't had an increase since July 2009.
States are bound by the federal minimum but can go higher if they want. Twenty-nine states and the District of Columbia now have minimum wages higher than the $7.25 federal minimum wage, according to the National Conference of State Legislatures. Five states – Alabama, Louisiana, Mississippi, South Carolina, and Tennessee – have no minimum wage, and two states, Georgia and Wyoming, have a minimum wage below $7.25 per hour. Those states still must abide by the federal minimum.
Biden's executive order by 2024 will also eliminate the tipped minimum wage for federal workers, known as the sub-minimum wage. Federal law allows employers to pay tipped workers less than the minimum wage as long as tips bring the final incomes up to the minimum. Former President Barack Obama raised the wages for tipped workers but did not eliminate the sub-minimum wage.
Biden will also reverse an executive order by President Donald Trump that eliminated minimum wage protections for guides and outfitters working on federal lands, such as national parks.
Source:-https://www.usnews.com/news/politics/articles/2021-04-27/biden-to-impose-15-hourly-minimum-wage-for-federal-contractors
