President Biden plans to sign an executive order on Tuesday that will raise the minimum wage paid by federal entrepreneurs to $ 15 an hour. This is the latest in a string of ambitious pro-Labor measures at the start of his term in office.
The new minimum is expected to come into effect next year and is expected to affect hundreds of thousands of workers, according to a White House document. The current minimum is $ 10.95 under an ordinance signed by President Barack Obama in 2014. Like this regulation, the new one requires that the new minimum wage rise with inflation.
White House economists believed the surge would not result in significant job losses, which is in line with recent research into the minimum wage and that it is unlikely to cost taxpayers more money, two government officials said in a call with reporters. They argued that the higher wages would lead to higher productivity and lower sales.
The White House also contends that while the number of workers directly affected by the increase is relatively small relative to the economy, the executive order will indirectly increase wages beyond federal contractors by forcing other employers to compete for workers to raise wages.
Some cities have minimum wages of at least $ 15 an hour, and some states have laws raising their minimum wages to at least that level in the coming years. So far, there is little evidence of how a minimum wage of USD 15 would affect employment in low-cost areas in such countries.
Two years ago the House of Representatives passed a bill to raise the federal minimum wage to $ 15 an hour by 2025, but the legislation has great prospects in the Senate. Mr Biden tried to include such a measure in his $ 1.9 trillion pandemic aid package so it could be passed by a simple majority, but the Senate MP ruled it could not be included.
The order from Mr Biden will also abolish what is known as the federal minimum wage, which currently allows employers to pay workers with tips $ 7.65 an hour as long as their tips bring them above the regular minimum wage. Under the new minimum, all workers must be paid at least $ 15 an hour.
Technically, the contract will begin a regulatory process that is expected to be completed early next year. The wages will be included in new contracts and existing contracts as soon as they are renewed.
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