The Department of Labor has finalized a rule raising the minimum wage for federal contractors to $15 an hour for new and existing contracts beginning in January.
The rule, which raises the minimum wage for federal contractors from $10.95 and indexes the wage to inflation, is expected to impact about 327,000 people working as janitors, cafeteria workers, nursing assistants and more. Workers on a tipped wage will also see their non-tipped wages raised, as the guidance eliminates the tipped minimum wage, which is currently at $7.65 an hour, by 2024.
The guidance comes months after President Joe Biden signed an executive order on the matter in April.
The workers who will be affected by this rule “do essential work on our nation’s behalf,” Secretary of Labor Marty Walsh said in a statement. “They build and repair the federal infrastructure, clean and maintain our national parks, monuments and other federal facilities, care for our veterans, and ensure federal workers and military service members are provided with safe and nutritious food,” he continued, pointing out that many of the workers who will be affected are people of color.
According to the agency, just over half of the workers who will be impacted by this order are women. On average, workers will receive a raise of $5,228 yearly. The Biden administration says that this order will have a positive effect not only on the workers, but also on federal work at large, increasing productivity, decreasing turnover and boosting efficiency.
Experts have estimated that about 5 million people work on federal contracts, with most of them already making above the $15 an hour threshold.
Biden’s order expands on an order by former President Barack Obama in 2014 ruling that federal contractors be paid $10.10 an hour minimum, also indexed to inflation.
Monday’s guidance is part of the president’s promise to raise the federal minimum wage to $15 an hour for all workers, though Biden has done little to push Congress on the issue since it was shot down from the stimulus package earlier this year. The Senate parliamentarian had ruled that the provision couldn’t be included in the American Rescue Plan Act, despite evidence that it would have an impact on the federal budget and thus should have been eligible for a vote via budget reconciliation.
Even though Vice President Kamala Harris could have overruled the parliamentarian’s decision, the administration chose not to do so, much to the dismay of progressive lawmakers and advocates.
Economists say that although raising the minimum wage to $15 an hour is crucial, the raise doesn’t go far enough. For a family of four, researchers have found that $15 an hour isn’t a living wage. For a single person without kids, a $15 minimum wage is a living wage in some parts of the country — but in more expensive states in the West and Northeast, it falls short.
If the minimum wage had kept in step with inflation and productivity since it was first set in 1938, the wage would be much higher. The first federal minimum wage in the country was $4.90 in today’s dollars, not much lower than the current rate of $7.25 for non-tipped workers — and higher than the current rate of $2.13 for tipped workers. Taking rising productivity rates into account, the federal minimum wage would be $31.67 an hour, or over four times the current minimum wage, said University of Massachusetts Amherst economist Robert Pollin earlier this year.
We’re not backing down in the face of Trump’s threats.
As Donald Trump is inaugurated a second time, independent media organizations are faced with urgent mandates: Tell the truth more loudly than ever before. Do that work even as our standard modes of distribution (such as social media platforms) are being manipulated and curtailed by forces of fascist repression and ruthless capitalism. Do that work even as journalism and journalists face targeted attacks, including from the government itself. And do that work in community, never forgetting that we’re not shouting into a faceless void – we’re reaching out to real people amid a life-threatening political climate.
Our task is formidable, and it requires us to ground ourselves in our principles, remind ourselves of our utility, dig in and commit.
As a dizzying number of corporate news organizations – either through need or greed – rush to implement new ways to further monetize their content, and others acquiesce to Trump’s wishes, now is a time for movement media-makers to double down on community-first models.
At Truthout, we are reaffirming our commitments on this front: We won’t run ads or have a paywall because we believe that everyone should have access to information, and that access should exist without barriers and free of distractions from craven corporate interests. We recognize the implications for democracy when information-seekers click a link only to find the article trapped behind a paywall or buried on a page with dozens of invasive ads. The laws of capitalism dictate an unending increase in monetization, and much of the media simply follows those laws. Truthout and many of our peers are dedicating ourselves to following other paths – a commitment which feels vital in a moment when corporations are evermore overtly embedded in government.
Over 80 percent of Truthout‘s funding comes from small individual donations from our community of readers, and the remaining 20 percent comes from a handful of social justice-oriented foundations. Over a third of our total budget is supported by recurring monthly donors, many of whom give because they want to help us keep Truthout barrier-free for everyone.
You can help by giving today. Whether you can make a small monthly donation or a larger gift, Truthout only works with your support.