Story at a glance

  • President Biden will sign an executive order mandating a $15 per hour minimum wage for federal contractors.
  • The rule will take effect in January 2022.
  • Critics say an increased minimum wage will increase prices for goods and services.

Biden’s executive order will also eliminate an adjusted minimum wage for tipped workers, and keep minimum wage consistent with inflation levels. 

“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 announcement reads. 

Increasing the minimum wage has been addressed at the state level and was addressed by President Biden shortly after his inauguration. 

A recent report issued by the Congressional Budget Office (CBO) suggests that with a nationwide $15 minimum wage, about 1 million people would be lifted out of poverty. It also notes that some goods and services would potentially cost more to offset the effect of increased wages, and overall employment stands to decline.

Longtime advocates of a $15 minimum wage, such as Sen. Bernie Sanders (I-Vt.), support Biden’s decision to set a higher floor for federal contractor wages. 

“I applaud President Biden’s important action to raise the minimum wage for federal contract workers to $15 an hour,” he tweeted. “Congress should follow his lead and end starvation wages for the rest of the nation.”

Legislation to mandate a national minimum wage of $15 per hour by 2026 was proposed by the senate in late January, with Sanders as its primary sponsor. 

Other advocates for a $15 minimum wage have similarly praised the decision. 

Fight for $15, a nonprofit dedicated to policy advancement and worker support of a $15 minimum wage, told The Hill that Biden's executive order is an "incredible victory" for working Americans.

"Today’s executive order means that our taxpayer dollars won’t go toward poverty-wage jobs, but rather towards good jobs that pay workers enough to support our families after the devastation of the pandemic and revitalize the Black and brown communities where we live and work," the organization said. "It adds hundreds of thousands of families to the tens of millions of workers who have won $15/hr since our fight for a living wage and a voice on the job began more than eight years ago."


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Published on Apr 27, 2021