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economic policy institute
Trump Assault on Federal Contractor Wages Could Mean 25% Pay Cuts for Hundreds of Thousands
"A higher federal contractor wage standard is good for employers and the federal government overall," said one left-leaning think tank.
Apr 11, 2025
After U.S. President Donald Trump last month undid a Biden-era regulation that required businesses that contract with the federal government to pay their workers a $17.75 an hour minimum wage, the Center for American Progress released an analysis Friday which found that some workers impacted by the change could see a 25% pay cut.
Thanks to rollback from Trump, "corporations working on government contracts are free to cut wages for hundreds of thousands of workers," according to the author of the analysis, who also said that the move constitutes a new front in the Trump administration's "war on workers."
Former President Joe Biden's order, which was announced in 2021 and went into effect in 2022, initially raised the minimum wage to $15 an hour with automatic updates, which bumped it the minimum up to $17.75 in January 2025.
The rescission was part of an executive order that reversed 18 "harmful executive orders and actions" issued by Biden.
According to CAP, a liberal think tank, Trump's scrapping of the Biden minimum wage protection leaves in place an Obama-era rule, meaning some workers on federal contracts can now be paid a minimum of $13.30 an hour.
The analysis arrived at the 25% pay cut by calculating the difference between the $17.75 floor and $13.30. However, CAP noted that the U.S. Department of Labor still has to issue guidance over how it will enforce this older wage standard.
Other wage protections for workers on federal contracts exist, but CAP argues that "they are inadequate for protecting the workers who just saw their minimum wage taken away."
The Davis-Bacon Act establishes minimum prevailing wage standards for workers on federal construction sites, for example, but the wages established under the law can be much lower than $17.75 an hour, according to the analysis.
"The boost for workers from the Biden minimum wage increase that the Trump administration just nullified was substantial," according to CAP, which cites a Department of Labor estimate from 2021 that the change would impact 327,300 employees in the first year of implementation.
In 2021, the left-leaning think tank the Economic Policy Institute estimated that, taking into account the hundreds of thousands of workers who could see their wages raised through Biden's executive order, the total pay increases thanks to the rule would amount to $1.2 billion in 2022.
"A higher minimum wage for federal contractors helps ensure that taxpayer dollars incentivize good jobs, rather than low-wage jobs where contractors compete with each other in a race to the bottom," according to a statement from EPI following Trump's rescission of the minimum wage rule. "A higher federal contractor wage standard is good for employers and the federal government overall."
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'Batsh*t Crazy' Trump Tariffs Should Be Seen as $7,000 Tax Hike on Workers, Says Economist
Instead of strategically imposing tariffs, Trump has chosen to "give the country the most massive tax increase in its history, possibly exceeding $1 trillion on an annual basis."
Apr 03, 2025
As stocks "nosedived" on Thursday, economists, policymakers, and campaigners around the world continued to warn about the impacts of U.S. President Donald Trump's trade war, which includes a 10% universal tariff for imports and steeper duties—that he claims are "reciprocal"—for dozens of countries, set to take effect over the next week.
"This is how you sabotage the world's economic engine while claiming to supercharge it," wrote Nigel Green, CEO of the international financial consultancy deVere Group. "Trump is blowing up the post-war system that made the U.S. and the world more prosperous, and he's doing it with reckless confidence."
As Bloombergdetailed after the president's "Liberation Day" remarks from the White House Rose Garden:
China's cumulative tariff rate of 54% includes both the 20% duty already charged earlier this year, added to the 34% levy calculated as part of Trump's so-called reciprocal plan, according to people familiar with the matter. The European Union's rate is 20% and Vietnam's is 46%, White House documents showed. Other nations slapped with larger tariffs include Japan with 24%, South Korea with 25%, India with 26%, Cambodia with 49%, and Taiwan with 32%.
In Europe on Thursday, "the regional Stoxx 600 index provisionally ended down around 2.7%," while "the U.K.'s FTSE 100 was down 1.6%, with France's CAC 40 and Germany's DAX posting deeper losses of 3.3% and 3.1%, respectively," according toCNBC.
In the United States, CNBCreported, "the broad market index dropped 4%, putting it on track for its worst day since September 2022. The Dow Jones Industrial Average tumbled 1,200 points, or 3%, while the Nasdaq Composite fell 5%. The slide across equities was broad, with decliners at the New York Stock Exchange outnumbering advancers by 6-to-1."
American exceptionalism.
[image or embed]
— Justin Wolfers ( @justinwolfers.bsky.social) April 3, 2025 at 12:14 PM
However, as Economic Policy Institute (EPI) chief economist Josh Bivens noted last week, "because most households depend overwhelmingly on wages from work as their primary source of income and not returns from wealth-holding, the stock market tells us nothing about these households' economic situations."
And Trump's tariffs are expected to hit U.S. households hard, as the cost of his taxes on imports are passed on to consumers.
"Tariffs can be a legitimate and useful tool in industrial policy for well-defined strategic goals, but broad-based tariffs that significantly raise the average effective tariff rate in the United States are unwise," Bivens and EPI senior economist Adam Hersh stressed in a Thursday statement—which also called out Trump for mischaracterizing one of the think tank's 2022 analyses.
"Further, the second Trump administration's rationale, parameters, and timeline for tariffs have been ever-shifting," Bivens and Hersh continued. "As the original post cited by the administration argues, tariffs should not be a goal unto themselves, but a strategic tool to pair with other efforts to restore American competitiveness in narrowly targeted industrial sectors."
Instead of strategically imposing tariffs, Trump has chosen to "give the country the most massive tax increase in its history, possibly exceeding $1 trillion on an annual basis, which comes to $7,000 per household," warned Center for Economic and Policy Research co-founder and senior economist Dean Baker. "And this tax hike will primarily hit moderate and middle-income families. Trump's taxes go easy on the rich, who spend a smaller share of their income on imported goods."
Baker—like various other economists and journalists—also took aim at Trump's claims that the tariffs are reciprocal, explaining:
Trump's team calculated our trade deficit with each country and divided it by their exports to the United States. Trump decided that this figure was equal to that country's tariff on goods imported from the U.S.
Trump's method of calculating tariffs is comparable to the doctor who assesses your proper weight by dividing your height by your birthday. Any doctor who did this is clearly batshit crazy, and unfortunately so is our president. And apparently none of his economic advisers has the courage and integrity to set him straight or to resign.
However, outside Trump's administration, the intense criticism continued to mount, including from groups focused on combating the fossil fuel-driven climate emergency, which also endangers the global economy.
Andreas Sieber, associate director of policy and Campaigns at 350.org, said Thursday that "Trump's tariffs won't slow the global energy transition—they'll only hurt ordinary people, particularly Americans."
"Despite his claims he 'gets' economic policy, his record tells a different story: Tariffs are tanking U.S. stocks and fueling inflation," Sieber added. "The transition to renewables is unstoppable, with or without him. His latest move does little to impact the booming clean energy market but will isolate the U.S. and drive up costs for American consumers."
Allie Rosenbluth, U.S. campaign manager at Oil Change International, similarly emphasized that "Trump's tariffs will hurt working families first and foremost, raising costs for essentials we depend on and threatening to plunge the U.S. economy into a recession. Though Trump pretends to care about the cost of living for ordinary people, his real loyalties lie with his fossil fuel industry donors."
"If he actually cared about energy affordability, he would stop bullying other countries into buying more U.S. liquefied natural gas (LNG), which boosts the fossil fuel industry's profits, but results in increased prices for domestic consumers and pushes us further toward climate catastrophe," she asserted. "The one step countries can take to hit Trump where it hurts most is wean off their dependency on fossil fuels from the United States."
The impact of Trump's new levies won't be limited to working-class people in the United States. Nick Dearden, director of U.K.-based Global Justice Now, pointed out that "Trump has set light to the global economy and unleashed a world of pain, not least on a group of developing countries that will suffer tremendous impoverishment as a result of his punitive tariffs."
"All those affected must come together and stand up to this bully by building a very different international economy that promotes the interests of ordinary people rather than the oligarchs standing behind Trump," he argued. "For all its scraping and crawling, the U.K. got no special treatment here, and the government should learn this lesson fast: They need to stop giving away our rights and protections in a futile effort to appease Donald Trump."
Leaders in the United States are also encouraging resistance to Trump. U.S. Sen. Chris Murphy (D-Conn.) said Wednesday that "this week you will read many confused economists and political pundits who won't understand how the tariffs make economic sense. That's because they don't. They aren't designed as economic policy. The tariffs are simply a new, super dangerous political tool."
Murphy made the case that "the tariffs are DESIGNED to create economic hardship. Why? So that Trump has a straight face rationale for releasing them, business by business or industry by industry. As he adjusts or grants relief, it's a win-win: the economy improves and dissent disappears."
"But as long as we see this clearly, we can stop him. Public mobilization is working. Today, a few Republicans joined Democrats to vote against one set of tariffs," he added, referring to a
resolution that would undo levies on Canadian imports. "The people still have the power."
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Trump Attacks Public Service Workers With 'Blatantly Illegal' Loan Forgiveness Order
"Threatening to punish hardworking Americans for their employers' perceived political views is about as flagrant a violation of the First Amendment as you can imagine," said one critic.
Mar 10, 2025
Criticism of U.S. President Donald Trump's executive order intended to limit a program that forgives the federal student loans of borrowers who take public service jobs has grown since he signed it on Friday.
Opponents frame the order as yet another attempt by Trump to quash dissent. The Republican president directed Education Secretary Linda McMahon to propose revisions to the Public Service Loan Forgiveness (PSLF) Program, in coordination with Treasury Secretary Scott Bessent, to exclude "organizations that engage in activities that have a substantial illegal purpose."
The order targets employers "aiding or abetting" violations of federal immigration law and the administration's definition of illegal discrimination, engaging in a pattern of violating state law such as disorderly conduct and obstruction of highways, "supporting terrorism," and "child abuse, including the chemical and surgical castration or mutilation of children or the trafficking of children to so-called transgender sanctuary states for purposes of emancipation from their lawful parents."
Student Defense president Aaron Ament said in a statement that "when PSLF was created by a bipartisan act of Congress and signed into law by [President] George W. Bush, it was a promise from the United States government to its citizens—if you give back to America, America will give back to you."
"In the nearly two decades since, across administrations of both parties, Americans have worked hard and made life decisions under the assumption that the U.S. keeps its word," Ament continued. "Threatening to punish hardworking Americans for their employers' perceived political views is about as flagrant a violation of the First Amendment as you can imagine."
Nadine Chabrier, senior policy counsel at the Center for Responsible Lending, similarly highlighted "serious" First Amendment concerns, saying that "by penalizing individuals seeking loan forgiveness for their associations and the expressive conduct of their employers, new rulemakings could infringe on fundamental rights to speech and association."
"The executive order also undermines the very purpose of PSLF, which Congress established to encourage careers in public service across a broad range of fields," she said. "Stripping PSLF eligibility from nonprofit employees based on the nature of their work will deter skilled professionals from pursuing careers that benefit the public good, weaken critical services for underserved populations and hamper efforts to strengthen vulnerable communities."
American Federation of Teachers (AFT) president Randi Weingarten explained that "PSLF is based on the idea that borrowers who make 10 years of repayments, and who often forgo higher wages in the private sector, can avoid a lifelong debt sentence."
The teachers union sued the Trump's first-term education secretary, Betsy DeVos, "and rogue loan servicers for their failure to administer the program—and we won," Weingarten noted. "This latest assault on borrowers' livelihoods is a cruel attempt to finish the demolition job that DeVos started. The goal is to sow chaos and confusion—separately, the PSLF application form has already been taken offline, making it effectively inaccessible."
The Economic Policy Institute pointed out Monday that "since the creation of the PSLF program, more than 1 million borrowers have received student loan forgiveness, largely due to fixes made under the Biden administration."
"More than 2 million individuals currently qualify for the PSLF program, according to the Department of Education," the think tank added. "The executive order could potentially narrow which organizations qualify for the program."
Student Borrower Protection Center executive director Mike Pierce blasted the order as "blatantly illegal and an all-out weaponization of debt intended to silence speech that does not align with President Trump's MAGA agenda."
"It is an attack on working families everywhere and will have a chilling effect on our public service workforce doing the work every day to support our local communities," Pierce warned. "Teachers, nurses, service members, and other public service workers deserve better than to be used as pawns in Donald Trump's radical right-wing political project to destroy civil society. This will raise costs for working people while doing nothing to make America safer or healthier."
In addition to scathing critiques, some groups threatened to challenge the order. Weingarten vowed that "the AFT won't stop fighting, in court and in Congress, until every single public service worker gets the help the law affords them."
Ament declared that "if the Trump administration follows through on this threat, they can plan to see us in court."
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