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President Joe Biden is signing an executive order to increase the minimum wage to $15 an hour for federal contractors.
The executive order states that federal agencies will have to include the $15 wage in new contracts by March 30, 2022.
In 2014, the minimum wage was increased to $10.10.
Currently, the minimum wage for federal contract workers is $10.95.
The executive order also includes a provision that would index the minimum wage to keep up with the rising cost of living and eliminates the tipped minimum wage by 2024.
The Biden administration said that the minimum wage would not cost taxpayers. A White House official said that the wage increase would ensure reduced turnover, absenteeism, training, and supervisory costs, and lower recruitment
The Economic Policy institute estimates that up to 390,000 low-wage federal contractors will see a raise under the policy and that the average annual pay increase for affected year-round workers would be approximately $3,100. Among those who are expected to see their wages rise, roughly half will be women, and roughly half will be Black or Hispanic.
