Minimum Wage Increased to $15 for Federal Contractors

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President Biden is issuing an executive order today to raise the minimum wage from $10.95 to $15 for federal contractors, the White House said in a statement.

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Starting Jan. 30, 2022, the order requires that all agencies incorporate a $15 minimum wage in new contract solicitations, and by March 30, 2022, implement the minimum wage into new contracts, according to the statement.

In addition, the order requires that the minimumum wage continue to be indexed to an inflation measure so that every year after 2022 it automatically adjusts to reflect changes in the cost of living, the White House said.

The minimum wage for workers performing work on covered federal contracts is currently $10.95 per hour, and the tipped minimum wage is $7.65 per hour.

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“This executive order will promote economy and efficiency in federal contracting, providing value for taxpayers by enhancing worker productivity and generating higher-quality work by boosting workers’ health, morale, and effort,” the White House said in the statement. “At the same time, the executive order ensures that hundreds of thousands of workers no longer have to work full time and still live in poverty. It will improve the economic security of families and make progress toward reversing decades of income inequality.”

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The Biden administration unsuccessfully tried to incorporate raising the federal minimum wage to $15 an hour in the $1.9 trillion American Rescue Plan signed into law in March.

See: $15 Minimum Wage Would Reduce Poverty, but at What Cost?
Find: This Is the Living Wage You Need in All 50 States

The federal minimum wage, which stands at $7.25, hasn’t been increased since 2009, although many states have minimum wages that are higher. According to data from the U.S Bureau of Labor Statistics, in 2019, 82.3 million workers (16 and older) were paid at hourly rates, representing 58.1% of all wage and salary workers. Among those paid by the hour, 392,000 workers earned exactly the prevailing federal minimum wage of $7.25 per hour. About 1.2 million had wages below the federal minimum. Together, these 1.6 million workers with wages at or below the federal minimum made up 1.9% of all hourly paid workers.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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