President Biden signed an executive order Tuesday to increase the minimum wage to $15 an hour for federal contractors, providing a pay bump to hundreds of thousands of workers. Biden administration officials said that the higher wages would lead to greater worker productivity, offsetting any additional costs to taxpayers, the AP reports. The Economic Policy Institute estimates that as many as 390,000 low-wage federal contractors would receive a raise, with roughly half of the beneficiaries being Black or Hispanic workers. There are an estimated 5 million contract workers in the federal government, according to a posting last year for the Brookings Institution by Paul Light, a public policy professor at New York University.
The increase could be dramatic for workers who earn the current minimum of $10.95 an hour. Those workers would receive a 37% pay hike, though the increase would be rolled out gradually, according to the terms of the order. The White House said the workers would include cleaning professionals and maintenance workers, nursing assistants who care for veterans, cafeteria workers providing for the military, and laborers who build and repair federal infrastructure. All federal agencies would need to include the higher wage in new contract offerings by Jan. 30 of next year. The wage would be indexed to inflation, so it would automatically increase with each year to reflect changes in prices.
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