Proposed rule would increase minimum wage for federal contract workers

United States Labor Secretary Thomas E. Perez announced a proposed rule on Thursday to raise the minimum wage for federal contract workers to $10.10 an hour.

“With a minimum wage of $10.10 an hour, the government would practice what it preaches. It will also improve the efficiency and productivity of our contract workers,” Perez said during a telephone news conference. “Congress must now follow the president.”

The federal minimum wage is currently $7.25 an hour.

“If the minimum wage was raised for all workers, it would lift 2 million out of poverty and affect 28 million other people,” Perez said.

“The minimum wage is worth 20 percent less now that it was 30 years ago. Ever since the Fair Labor Standards Act was passed under FDR 76 years ago, a majority of Americans have supported it.”

White House Domestic Policy Director Cecilia Muñoz said, “This administration has been hard at work on a number of efforts that affect the lives of many Americans. President Obama has made this a year of action.

“Everyone should have a chance at success if you are working and obey the rules. As one of the country’s largest employers, not only would we do right for our employees but set an example for the rest of the country,” Munoz said.

“Raising the minimum wage is also a smart business policy, a policy that companies like Coscto are willing to make,” Munoz said.

Today, Costco pays its employees an average of nearly $21 per hour. The wholesale retailer’s starting hourly pay is $11.50 an hour.

“This will be good for America’s bottom line, for contractors and for taxpayers,” Muñoz said.

“Average wages have hardly budged recently,” Muñoz said. “This is about restoring opportunity for all. The average worker getting a minimum wage is 35 years old.

“More than half have their job full-time. One third of them are raising children and half of them are women,” Muñoz said.

But in a report released in February, the Congressional Budget Office stated that even though a $10.10 minimum wage would raise many people out of poverty, it could mean that as many as 500,000 workers might lose their jobs.

Perez said, “We will be accepting [public] comments for the next month on this proposal. The rule [for a $10.10 minimum wage] will come into effect for government contracts issued after Jan. 1, 2015.

“No person who works a full-time job should have to live in poverty,” Perez said. “The proposed rule will also improve the quality of service we receive. I have met with employers who pay a fair wage and said that increased productivity.”

Some federal contract workers are demanding that the White House require its contractors to recognize the right to collective bargaining, as well as paying a higher minimum wage.

Muñoz said, “Collective bargaining is not part of this executive order and not part of the proposed rule-making we are announcing today.”

The U.S. Department of Labor provides statistics about wages and hours on its website:\whd.

Today, 22 states require employers to pay a minimum wage higher than the federal minimum wage of $7.25 an hour, while 19 states pay that wage. Four states have lower minimum wage rates, and five states have no minimum wage laws at all, according to the DOL website.

West Virginia is one of the states whose minimum wage matches the current federal rate of $7.25 an hour.

States with higher minimum wage rates are primarily western, central and Northeastern states, as well as Alaska and Florida.

Most states requiring lower minimum wages are in the South. States with lower rates are: Georgia, Arkansas, Colorado and Minnesota. States with no minimum wage laws at all are: Louisiana, Alabama, Mississippi, Tennessee and South Carolina.

Reach Paul J. Nyden at or 304-348-5164.

More News