Center for American Progress

STATEMENT: Raising the Contractor Minimum Wage and Phasing Out the Subminimum Wage for Disabled Contractors Will Improve Hundreds of Thousands of Lives
Press Statement

STATEMENT: Raising the Contractor Minimum Wage and Phasing Out the Subminimum Wage for Disabled Contractors Will Improve Hundreds of Thousands of Lives

Washington, D.C. — Today, the U.S. Department of Labor announced the final rule raising the minimum wage for federal contractors to $15, as required by Executive Order 14026, “Increasing the Minimum Wage for Federal Contractors,” which was signed by President Joe Biden in April. Following the announcement, Karla Walter, senior director of Employment Policy at the Center for American Progress, released the following statement:

Raising the contractor minimum wage to $15 per hour would improve the lives of hundreds of thousands of American workers and help close pay disparities for women and Black and Latino workers, who are more likely to be employed in the low-wage industries that the federal government contracts out. The rule also boosts equity by eliminating the tipped minimum wage for contract workers by 2024, ensuring coverage for disabled workers, and extending contractor minimum wage protections to workers in Puerto Rico and other U.S. territories. Corporations receiving billions in government spending must function as model employers. The final rule is a critical step toward delivering on President Biden’s commitments to raise wages for workers and support a robust economic recovery. It will help ensure that the investments in the Infrastructure Investment and Jobs Act and Build Back Better Act support working Americans from all walks of life.

Mia Ives-Rublee, director of the Disability Justice Initiative at CAP, added:

This is a huge win for the disability community, which has been fighting for years to phase out 14c—a waiver from the U.S. government allowing employers to pay subminimum wages. The current average pay for disabled workers is $3.34 per hour, trapping many below the poverty line. In 2019, 25.9 percent of disabled people lived in poverty compared with 11.4 percent of nondisabled people. Ensuring pay equity for disabled people is an important step toward providing equal rights to the 1 in 4 Americans who are disabled and will also boost the economy.

Related resource: “Service Contract Workers Deserve Good Jobs” by Karla Walter and Anastasia Christman, Center for American Progress Action Fund

For more information on this topic or to speak with an expert, please contact Julia Cusick at jcusick@americanprogress.org.

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