First 100: Biden raises minimum wage for federal contractors

The order comes as talks for legislative actions on the federal minimum wage have stagnated

May 5, 2021

President Biden signed an executive on Tuesday raising the federal minimum wage to $15 an hour for federal contractors. The move comes after Congress blocked efforts to pass an increase in the federal minimum wage across the country.

The pay increase is expected to benefit thousands of workers considered essential to the functionality of the government such as maintenance workers and nursing assistants.

Agencies are expected to start taking the wage increase into effect no later than March 30, 2022. Currently, the minimum wage for federal contractors is at $10.95 an hour, after then-President Barack Obama signed an executive order increasing it in 2014. Biden’s order also eliminates the tipped minimum wage for federal contractors, along with allowing the minimum wage to keep up with the rate of inflation.

Economists in the White House have argued that the wage increase will be beneficial for everyone, despite the order only affecting a small percentage of workers. Arguments made in favor of the order state that the increase will lead to higher productivity and lower turnover rates among the workforce. They have also contended that it will lead to employers competing in a bid to increase pay for workers.

Efforts to pass legislative efforts in Congress stalled prompting Biden to act through the usage of executive orders. Democrats in both the House and the Senate reintroduced the Raise the Wage act in January, which would have increased the federal minimum wage to $15 by 2025 along with similar provisions to what was included in Biden’s order. 

Biden’s efforts to increase the federal minimum wage through executive orders are similar to how President Obama’s efforts were when Congress failed to pass legislation to increase the minimum wage in 2014. The unwillingness from the Republican party at the time – and currently – only prompted the usage of executive orders from the respective presidents.

FedEx driver Darren Lang praised the decision as a step in the right direction. Lang, a contracted driver for Fedex, would be one of the people who would benefit from the pay increase due to FedEx’s policy of classifying drivers as independent contractors.

“I think it’s a good thing to increase the wage to $15, it will help a lot of people struggling to get by. It will help me in particular also,” Lang said 

Some critics are still unsatisfied with the actions by President Biden, noting that the president should have spent more time getting a legislative solution. Salvador Gomez, a current Cal-Tech student, still felt that more could have been done by Biden, like trying to get the eight Democrats who voted against Sen. Bernie Sanders’ minimum wage proposal to fall in line.

“It’s not like it was a majority of the Democrats that were against the minimum wage hike — only eight of them were against it,” Gomez said.

Even supporters of the order, such as Vick Damone and FedEx manager Michael Segura, still view the action as only a small step in the right direction.

For other individuals across the country, it’s a big win. For us, it’s just a start in the Bay Area and California, and it’s still not enough for us.”

— Michael Segura

“For other individuals across the country, it’s a big win. For us, it’s just a start in the Bay Area and California, and it’s still not enough for us,” Segura said. “It’s still extremely expensive housing everywhere. I couldn’t understand holding a management title and being still below the middle class.” 

The introduction of the order is still a positive sign for the minimum wage increase advocates in the country. A majority of Americans overwhelmingly support an increase with 59% supporting the measure, compared to 34% opposing. 

Sanders, who has been known as a strong advocate for the wage increase, praised Biden’s move. While favorable to the actions, Sanders has urged Congress to act, noting that only legislative efforts could enact significant change for minimum wage and not just the use of an executive order.

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

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First 100: Biden raises minimum wage for federal contractors