April 27, 2021
President Joe Biden is expected to sign an executive order today that will raise the minimum wage to $15 for all workers employed by federal contractors.
The mandate, which will affect hundreds of thousands of workers on federal contracts, requires that all agencies implement the new minimum wage into contracts by March 30, 2022. Biden has already signed a separate order to raise the minimum wage to $15 an hour for federal employees. The current minimum for contractors is $10.95.
Tuesday’s order will also require that federal agencies implement the higher wages into existing contracts when they are extended. It also includes a cost-of-living increase every year beginning in 2022.
The new order comes as no surprise. Biden is approaching 100 days in office, and among other promises, the White House promised in January that Biden would sign an executive order “within the first 100 days that requires federal contractors to pay a $15 minimum wage and provide emergency paid leave to workers.”
The administration argues that the wage hike will not raise costs for taxpayers because it would boost productivity and lower other expenses, such as supervisory and training costs.
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.