Biden increases contractors’ minimum wage

Hundreds of thousands of federal contractors could get a raise by next March. On Tuesday, President Joe Biden signed an executive order to raise the minimum wage to $15 an hour for qualifying workers, including cleaning, childcare, maintenance, cooking, and repair contractors. The current minimum is $10.95 per hour. The new wage would increase each year to reflect inflation.

Will this burden taxpayers? Administration officials said the higher wages would help employers retain workers and make them more productive, thus offsetting taxpayer costs. But increasing the minimum wage can also lead to a shortage of entry-level jobs. Biden’s March coronavirus relief bill included a provision to raise the country’s minimum wage to $15 an hour, but a Senate parliamentarian ruled Democrats couldn’t include that provision in the package.

Dig deeper: Read my report in Compassion on the unintended consequences of raising the minimum wage.