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.
Help us Prepare for Trump’s Day One
Trump is busy getting ready for Day One of his presidency – but so is Truthout.
Trump has made it no secret that he is planning a demolition-style attack on both specific communities and democracy as a whole, beginning on his first day in office. With over 25 executive orders and directives queued up for January 20, he’s promised to “launch the largest deportation program in American history,” roll back anti-discrimination protections for transgender students, and implement a “drill, drill, drill” approach to ramp up oil and gas extraction.
Organizations like Truthout are also being threatened by legislation like HR 9495, the “nonprofit killer bill” that would allow the Treasury Secretary to declare any nonprofit a “terrorist-supporting organization” and strip its tax-exempt status without due process. Progressive media like Truthout that has courageously focused on reporting on Israel’s genocide in Gaza are in the bill’s crosshairs.
As journalists, we have a responsibility to look at hard realities and communicate them to you. We hope that you, like us, can use this information to prepare for what’s to come.
And if you feel uncertain about what to do in the face of a second Trump administration, we invite you to be an indispensable part of Truthout’s preparations.
In addition to covering the widespread onslaught of draconian policy, we’re shoring up our resources for what might come next for progressive media: bad-faith lawsuits from far-right ghouls, legislation that seeks to strip us of our ability to receive tax-deductible donations, and further throttling of our reach on social media platforms owned by Trump’s sycophants.
We’re preparing right now for Trump’s Day One: building a brave coalition of movement media; reaching out to the activists, academics, and thinkers we trust to shine a light on the inner workings of authoritarianism; and planning to use journalism as a tool to equip movements to protect the people, lands, and principles most vulnerable to Trump’s destruction.
We urgently need your help to prepare. As you know, our December fundraiser is our most important of the year and will determine the scale of work we’ll be able to do in 2025. We’ve set two goals: to raise $115,000 in one-time donations and to add 1365 new monthly donors by midnight on December 31.
Today, we’re asking all of our readers to start a monthly donation or make a one-time donation – as a commitment to stand with us on day one of Trump’s presidency, and every day after that, as we produce journalism that combats authoritarianism, censorship, injustice, and misinformation. You’re an essential part of our future – please join the movement by making a tax-deductible donation today.
If you have the means to make a substantial gift, please dig deep during this critical time!
With gratitude and resolve,
Maya, Negin, Saima, and Ziggy