Around five million people work on federal government contracts, and up to 390,000 of them will be getting a raise starting on January 30, 2022. In April, President Joe Biden signed an executive order directing the minimum wage for federal contract workers be raised to $15 an hour, and this week, the Labor Department announced the final rule putting Biden’s order into effect.
The federal minimum wage has been $7.25 an hour for more than a decade, though many states and cities have raised their minimum wages. The $15 minimum for contract workers will be indexed to inflation, so it won’t stagnate. The new rule also includes disabled workers and eliminates the tipped worker subminimum wage by 2024.
The Economic Policy Institute’s Ben Zipperer laid out some possible benefits in addition to 390,000 people getting a raise:
In a video announcing the move, Labor Secretary Marty Walsh said, “The fact is, contract workers are essential workers, and critical to the federal government. They clean and maintain federal buildings, keeping us safe. They provide health care for veterans and child care for our kids. They provide food services for miliary families. And they build and repair roads and bridges, and so much more. This executive order improves the economic security of their families and communities, and makes progress towards reversing decades of income inequality. And it ensures that the federal government leads by example, creating good jobs for workers all across our country.”
The federal minimum wage has been $7.25 an hour for more than a decade, though many states and cities have raised their minimum wages. The $15 minimum for contract workers will be indexed to inflation, so it won’t stagnate. The new rule also includes disabled workers and eliminates the tipped worker subminimum wage by 2024.
The Economic Policy Institute’s Ben Zipperer laid out some possible benefits in addition to 390,000 people getting a raise:
In a video announcing the move, Labor Secretary Marty Walsh said, “The fact is, contract workers are essential workers, and critical to the federal government. They clean and maintain federal buildings, keeping us safe. They provide health care for veterans and child care for our kids. They provide food services for miliary families. And they build and repair roads and bridges, and so much more. This executive order improves the economic security of their families and communities, and makes progress towards reversing decades of income inequality. And it ensures that the federal government leads by example, creating good jobs for workers all across our country.”