About 300,000 workers to get a raise next year as higher minimum wage kicks in

About 300,000 workers to get a raise next year as higher minimum wage kicks in

Greater than 300,000 upkeep, safety and baby care workers will get a raise beginning next year beneath a new $15 an hour minimum wage for federal contractors, the Labor Division mentioned Monday. The brand new compensation scheme stems from an April govt order by President Joe Biden that raises the pay of federal workers.

The $15 baseline wage for federal contractors additionally will likely be listed to inflation and rise in subsequent years. The brand new pay flooring takes impact for any federal contract beginning on or after January 30, 2022.

Below the new rule, outfitters and guides on federal lands, as properly as some workers with disabilities who could be paid lower than the minimum wage, may have their pay raised to $15 an hour, labor officers mentioned. Beginning in 2024, tipped workers on federal contracts may also make not less than that quantity. At the moment, such workers could be paid lower than others as a result of employers assume that suggestions will make up the distinction.

“Federal contract workers are essential workers,” Labor Secretary Marty Walsh mentioned in a name with reporters. “The people who we’re going to be covering clean and maintain federal buildings. They provide child care for kids, they repair roads and bridges all across this country,” he mentioned.

The rule applies to all staff of a enterprise that has authorities contracts — not solely those that are working in federal buildings, officers mentioned.

The raise would have an effect on about 327,000 workers who at the moment are incomes lower than $15 per hour, mentioned Jessica Loomen, appearing administrator of the Labor Division’s wage and hour division. Lots of these staff work in safety, constructing upkeep and baby care.

“This administration feels very strongly about economic security and increasing wages for those essential workers,” Loomen mentioned.

Elevating the pay of presidency staff might not directly increase earnings for different workers, mentioned Ben Zipperer, an economist on the left-leaning Financial Coverage Institute. He pointed to research displaying that, when Amazon raised its beginning wage to $15 an hour in 2018, it led close by rivals to raise their pay as properly.

 “While not a substitute for a universal $15 [minimum] wage, there may be important spillover effects,” he mentioned.

EPI beforehand estimated that the rule would increase affected workers’ pay by greater than $3,000 a year on common.

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