Biden is pushing the federal minimum wage increase

The Democrats have been pushing for the minimum wage to be raised, and now President Joe Biden is about to make it happen.

The Washington Examiner reports that President Biden on Tuesday is expected to sign an executive order that will raise the minimum wage for employees who work for federal contractors to $15. 

Upon taking office, Biden promised to raise the minimum wage for those working for federal contractors to $15 within his first 100 days as president. The administration first attempted to sneak the minimum wage hike into the $1.9 trillion coronavirus spending bill, but the Senate parliamentarian didn’t let that happen. So, with the 100-day mark on the horizon, Biden is trying to make good on this promise unilaterally.

Some specifics

Biden, here, is following in the footsteps of former President Barack Obama who in 2014 set the minimum wage at $10.10 for employees of federal contractors. Now, that number will go up another roughly $5.

With regard to existing contracts, what Biden’s executive order will do is require all agencies to include the new $15 minimum wage in these contracts when they are extended. And, with regard to new contracts, Biden’s executive order will require all agencies to implement the new $15 minimum wage by March 30, 2022.

In addition, Biden’s executive order will phase out the $7.65 tipped minimum wage, again for those working for federal contractors, and replace it with a $15 minimum.

“Minimal” effect

The Washington Examiner quotes a Biden administration officials as saying: “This [executive order] promotes economy and efficiency in federal contracting. A $15 minimum wage will enhance worker productivity and generate higher quality work by boosting workers’ health, morale, and effort.”

The official, in addition to all of that, also said that the executive order will reduce both turnover and absenteeism.

Normally, it would be expected that a minimum wage increase would reduce employment. But, the Council of Economic Advisers is said to have found that Biden’s executive order will not have that effect.

One official claimed that the key difference is that it’s not the federal statutory minimum wage that is being raised but the minimum wage for employees of federal contractors, which is a smaller group of people. Accordingly, the official said that the effect on employment of Biden’s executive order is expected to be “minimal if any.”

Biden’s executive order is still expected to affect hundreds of thousands of workers.

Time will tell whether the Council of Economic Advisers is right or whether Biden’s minimum wage hike will have the usual effect of costing people jobs.

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