And although the number of workers directly affected by the increase is small as a share of the economy, the administration contends that the executive order will indirectly raise wages beyond federal contractors by forcing other employers to bid up pay as they compete for workers.
Paul Light, an expert on the federal work force at New York University, recently estimated that five million people are working on federal contracts, on which the government spends hundreds of billions of dollars each year. The companies receiving the contracts employ security guards, food workers, janitors, call center workers, nursing assistants and computer support technicians, among others.
The government requires that many employees of contractors be paid a prevailing wage — essentially the going rate for an occupation in a particular place, as determined by the Labor Department — but their pay will rise as a result of the order if the prevailing wage is less than $15 an hour. An analysis by the liberal Economic Policy Institute estimates that up to 390,000 workers will directly benefit.
But a recent report by the Government Accountability Office found that violations of government-mandated wage rates and benefits like vacation pay were common among contractors, leading to hundreds of millions of dollars in withheld compensation for workers from 2014 to 2019.
The Biden administration has proposed increasing the enforcement budget for the Labor Department, which monitors whether contractors are in line with wage and benefit rules, by nearly 20 percent.
Article source: https://www.nytimes.com/2021/04/27/business/economy/biden-minimum-wage-federal-contractors.html
Speak Your Mind
You must be logged in to post a comment.