President Joe Biden signed an executive order Tuesday requiring federal contractors to pay $15 an hour minimum wage, according to the White House.
Under the executive order, all agencies must include a $15 an hour minimum wage in new contract solicitations by Jan. 30, 2022. All agencies have until March 30, 2022, to implement it into new contracts. The order also directs federal agencies to raise the tipped minimum hourly wage to $15 an hour for federal employees.
Biden’s order builds on a similar act by former President Barack Obama who signed an executive order in 2015 to raise the wage to its current level of $10.95 an hour. President Biden is still pushing to raise the national minimum wage to $15 and tried to add it to his $1.9 trillion coronavirus relief bill.
That effort received stiff pushback from Republicans who say small businesses will not be able to afford to pay their employees that much.
A study conducted by the Congressional Budget Office found raising the federal minimum wage would bring about 1 million people out of poverty over the next four years. However, the study also found the increase would result in the loss of 1.4 million jobs, raise the budget deficit by $54 billion from 2021 through 2023 and raise prices for goods and services.
According to NBC News, a senior Biden administration official predicted: “hundreds of thousands” of workers would benefit but added the number is small compared to increasing the federal or state minimum wages.
“These workers are critical to the functioning of the federal government, from cleaning professionals and maintenance workers … to nursing assistants who care for the nation’s veterans, to cafeteria and other food service workers who ensure military members have healthy and nutritious food to eat, to laborers who build and repair federal infrastructure,” the official said.
On Wednesday, President Biden released his $1.8 trillion families plan that includes paid leave, child care, universal pre-K, and free community college. The plan is the second part of his “Build Back Better” plan following the release of his $2.3 trillion infrastructure plan.