Joe Biden has signed new executive orders raising the minimum wage for federal contractors and tipped employees working on government contracts to $15 an hour, according to NBC News.
The increase from $10.95 will be introduced in January and must be implemented no later than March.
Biden also signed an executive order effectively raising the minimum wage for federal employees to $15.
Federal agencies have to raise the minimum wage by 2024 to make sure that tipped employees working on federal contracts earn the same minimum wage as other employees on federal contracts.
The Jump from $10.95 to $15 is a 37% increase.
The executive order has increased the minimum wage for federal contract workers with disabilities.
The order was built off of an executive order implemented by the Obama administration.
Biden is also making it a priority to increase the national minimum wage to $15.
This minimum wage increase would apply to millions of Americans.
A minimum wage increase within the $1.9 trillion COVID-19 relief package will not be part of the bill.
Studies have shown that by raising the minimum wage, 1 million people would be brought out of poverty in four years.
Studies also revealed that the increase in the minimum wage would also cost 1.4 million jobs.
“These workers are critical to the functioning of the federal government, from cleaning professionals and maintenance workers… to nursing assistants who care for the nation’s veterans, to cafeteria and other food service workers who ensure military members have healthy and nutritious food to eat, to laborers who build and repair federal infrastructure.”
From NBC News:
A study released by the nonpartisan Congressional Budget Office in February found that raising the federal minimum wage to $15 an hour would bring nearly 1 million people out of poverty over the next four years, but it also found that it would result in the loss of 1.4 million jobs, raise the cumulative budget deficit by $54 billion from 2021 to 2023 and result in higher prices for goods and services.
The Biden administration official said increasing salaries would not add costs to the government or taxpayers because it would allow “employers to retain top talent and lower costs associated with recruitment, and training sites have been found to reduce absenteeism, lead to higher productivity and reduce supervisory costs.”
A senior Biden administration official could not give an exact number of federal contractors who would benefit, predicting “hundreds of thousands,” and noted that the number of workers would be small compared to increasing the federal minimum wage or a state’s minimum wage. The number is “something that’s not static, because federal contracts are not static, and it will take time to phase it in into new contracts,” the official said.
The official said that to implement the order, the Labor Department and the Federal Acquisition Regulatory Council would both have to issue rules to agencies. Once they are developed, they will be applied to new contracts, as well as contracts up for renewal, which will be reviewed and revised to include the new minimum wage.