Joe Biden is set to sign an executive order requiring federal contractors to pay a minimum wage of $ 15 an hour as the US president steps up pressure on companies to offer higher wages to their employees.
Biden’s move, expected Tuesday, comes as the president’s efforts to persuade Congress to lower a federal minimum wage hike across the country from $ 7.25 an hour to $ 15 an hour have failed, the leading to the search for unilateral solutions.
Senior administration officials say Biden’s executive order will order government agencies to require salary payments of $ 15 an hour in all contract solicitations from January 2022, implementing them in every contract by March of next year. Higher wages will also need to be included in annual contract extensions and indexed to inflation.
Biden made a higher minimum wage a cornerstone of his economic agenda, but failed to get enough support on Capitol Hill to get it through as part of the $ 1.9 billion stimulus package . Shortly after taking office, he asked officials to consider imposing a higher minimum wage on federal contractors, which led to the announcement scheduled for Tuesday.
Many Republicans and some moderate Democrats fear that higher minimum wages will reduce employment by imposing excessive burdens on businesses. But senior officials in the Biden administration dismiss these criticisms.
“It would not lead to a reduction in employment. . . but it would improve worker productivity and then create better quality work by improving workers’ health, morale and effort, ”a senior administration official said, noting that the proposal had been considered by the council. economic advisers from the White House. “It would reduce staff turnover, allow employers to retain top talent and reduce costs associated with recruiting and training sites.
Federal contractors are currently paying their workers at least $ 10.95 an hour, following an executive order signed by former President Barack Obama. Workers in line for a raise under Biden’s plan are predominantly in the service industry, described by the White House as cleaning professionals, housekeepers, nursing assistants, cafeteria workers, and laborers. that build and repair federal infrastructure.
The executive order would eliminate the ability of federal contractors to pay a lower minimum wage for workers who rely on tips, which is currently $ 7.65 per hour.
Biden’s push for a minimum wage hike has helped him sell his economic agenda to unions and the left flank of the Democratic Party. The US president will have another opportunity to discuss his support for the policy during his speech to Congress on Wednesday.
Some lawmakers have attempted to strike a compromise on Capitol Hill to see if raising the federal minimum wage to at least $ 11 or $ 12 an hour might be acceptable – many Democrats believe it does not meet the needs of the economy , while many Republicans believe the increase is a step too far.