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Minimum wage White House

Labor activists hold a rally in support of raising the minimum wage to $15 an hour on the National Mall on May 19, 2021 in Washington, DC. Members of the Service Employee International Union (SEIU) organized the rally in support of striking McDonald's workers who are demanding a wage increase. (Photo by Kevin Dietsch/Getty Images)

'Now, Let's Take This Nationwide': Biden Raises Minimum Wage for All Federal Contract Workers to $15

Congresswoman Pramila Jayapal says "30 million workers deserve a much-needed and well-deserved raise."

Jon Queally

Chair of the Congressional Progressive Caucus Pramila Jayapal celebrated Monday's announcement from the U.S. Labor Department that all federal contract workers will be paid at least $15 per hour starting in January, but also took the opportunity to argue that should be the wage floor should for all U.S. workers.

"Great news," tweeted Jayapal in response to the news. "Now, let's take this nationwide and give over 30 million workers a much-needed and well-deserved raise."

In a statement on Monday, the Labor Department said the finalized rule—which will apply to all workers employed under or related to federal contracts—will go into effect on January 30, 2022 and is the culmination of an executive order signed by President Joe Biden in April of this year.

The workers who will benefit from the new wage floor, said Labor Secretary Marty Walsh, “do essential work on our nation’s behalf. They build and repair the federal infrastructure, clean and maintain our national parks, monuments and other federal facilities, care for our veterans, and ensure federal workers and military service members are provided with safe and nutritious food.“

The federal rule will apply to an estimate 325,000 workers as new contracts are signed after January, though some working under existing contracts may not see that pay bump immediately. According to the Labor Department, the rule does the following:

  • Increases the hourly minimum wage for workers performing work on or in connection with covered federal contracts to $15 beginning Jan. 30, 2022. 
  • Continues to index the federal contract minimum wage in future years to inflation.
  • Eliminates the tipped minimum wage for federal contract employees by 2024. 
  • Ensures a $15 minimum wage for workers with disabilities performing work on or in connection with covered contracts.
  • Restores minimum wage protections to outfitters and guides operating on federal lands. 

Workers represented by SEIU applauded the rule.

"It would be such a relief to know that my job is protected because it would mean my family is protected too," said Ana Ayala, a single mother living in Woodbridge, Virginia who works as a janitor and is a member of 32BJ SEIU. "In Virginia, most janitors don’t make this much or have these benefits which are so critical as a single mother with a child depending on me."

Ben Zipperer, an economist with the left-leaning Economic Policy Institute, said in a lengthy blog post Monday that while the rule touches a relatively small percentage of the U.S. workforce, its impact could have positive reverberations.

"While not a substitute for a universal $15 minimum wage, there may be important spillover effects," said Zipperer, noting that other private employees will likely raise their wages in order to compete for labor and that higher wages will lead to less turnover and higher-quality services in industries like nursing home care.

"All in all this the new $15 minimum wage for federal contracts is excellent policy, another step to fixing a labor market that doesn’t deliver adequate wages," he said.

Earlier this year, the Senate Parliamentarian objected to inclusion of an amendment to raise the federal minimum wage for all U.S. workers to $15 an hour and progressives expressed outrage that the Biden administration did not do more to fight back in order to ensure that wages would be lifted for all.

"At a time when millions of workers are earning starvation wages, when the minimum wage has not been raised by Congress since 2007 and stands at a pathetic $7.25 an hour, it is time to raise the minimum wage to a living wage," Sanders, the chairman of the Senate Budget Committee, said at the time


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