Biden Administration, Congress Move to Raise Federal Minimum Wage

An executive order and a revised legislative proposal have the potential to more than double the minimum wage for all Americans by 2025. Presidential action could result in hourly raises for some people by this summer, but the prospects for bills to achieve a $15.hour standard by 2025 that have been introduced in the U.S. House and Senate remain unclear.

Doing More Than Paying Feds More

President Joe Biden on Jan. 22, 2021, ordered the director of the Office of Personnel Management to provide recommendations for ensuring all federal employees will earn at least $15 per hour. The current federal minimum wage has been at $7.25 per hour since 2009.

The call for new minimum wage rules from OPM was included in a broader E.O. titled “Protecting the Federal Workforce.” The order also eliminated Schedule F under the General Schedule and reinstated collective bargaining rights for U.S. government employees.

The Trump administration created Schedule F last fall. Senior civil servants placed into that category would have become at-will employees who presidential appointees could fire for any reason.

Biden has made strengthening union protections for public and private sector workers a priority. Additional steps toward keeping that commitment were

  • Reauthorizing official time for union reps at federal agencies
  • Restoring Merit System procedures that level the playing field for employees
  • Revoking presidential memoranda issued in May 2019 that made it easier to fire any federal employee, and
  • Revising rules for implementing disciplinary plans and performance improvement plans under collective bargaining agreements.

Upon signing the order, which would also raise the minimum wage for federal contractors, Biden said, “No one in America should work 40 hours a week making below the poverty line. Fifteen dollars gets people above the poverty line. We have so many millions of people working 40 hours a week—working—and some with two jobs, and they’re still below the poverty line.”

Democrats Push the Raise the Wage Act of 2021

Four days later, Sen. Bernie Sanders (I-Vt.) led a group of Democratic senators and members of the U.S. House of Representatives in reintroducing legislation that has been proposed in the last two Congresses. The latest version sets a four-year timeline for increasing the federally mandated minimum wage for private sector workers to $15 per hour by 2025.

As this chart shows, the bill also calls for eliminating the tipped wage and doing away with exceptions for workers younger than 18 and people with disabilities (i.e., the 14(c) column).

Scheduled Minimum Wage Increases

MW-Chart

The proposed changes would affect nearly 32 million people. Co-sponsor and chair of the House Committee on Education and Labor Rep. Bobby Scott (D-Va.) explained the need for the legislation this way: “Many of the essential workers who have braved a public health crisis to keep our economy moving are still not being paid enough to provide for themselves or their families. The Raise the Wage Act is a critical step toward lifting hardworking people out of poverty, addressing inequality, and ensuring that all Americans can share in the economic recovery.”

The fate of the legislation is unclear. Republicans in Congress have expressed little support for raising the minimum wage at all. Some GOP officials have gone so far as to say that including the Raise the Wage Act in a package of bills aimed at implementing the American Rescue Plan would lead them to reject the entire initiative.

Twenty-one states will have a $7.25 minimum wage through 2021 (though the rules vary greatly). Only Washington, D.C., currently mandates a $15 minimum wage, but several states are on their way toward that.

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