Fourteen right-wing attorneys general (AZ, AL, AR, GA, ID, IN, LA, MS, MO, MT, NE, OK, SC, TX), along with special interest groups, are leading or supporting three challenges to the $15 federal contractor minimum wage. These attacks are part of their broader effort seeking to effectively cut worker’s wages. Why? To score political points against the Biden administration. Armed with arguments grounded neither in the facts nor the law, these AGs are playing games with workers’ wallets.
In a huge win for workers this week, the U.S. Department of Labor defeated its first challenge to the federal contractor minimum wage rule. An Arizona federal judge found that President Biden has the authority to implement an increase to it, rejecting all legal arguments raised by attorneys general in Arizona, Idaho, Indiana, Nebraska, South Carolina and dismissing the case.
Let’s break down how we got here.
In 2021, the Biden administration used its lawful authority to protect minimum wage workers when it finalized a $15 per hour minimum wage for workers on federal contracts in a rule that became effective for new contracts after January of 2022.
The annual salary for employees of federal contractors making the minimum wage prior to this change fell below the 2021 Census Poverty Threshold for a family of four, which is $27,949. The federal wage increase pushes this annual salary above the poverty threshold and would do so for more than 327,000 workers. From janitors to call center workers, security guards to guides on federal lands, many industries that comprise our nation’s federal contractor work force and that are subject to increased minimum wage requirements are disproportionately composed of women, Black and Latinx workers.
Decades of precedent affirm that President Biden has the authority to set pay standards for workers on federal contracts. What’s more, when President Obama established a federal contractor minimum wage in 2014, no state challenged his authority to take such action.
Wage protections don’t just help workers — they help employers too. The final Labor Department federal contractor minimum wage rule showed a link between increased wages and morale and productivity increases, as well as decreases in employee turnover and absenteeism. Wage increases and protections are also an important part of building a strong middle class and strengthening the economy.
While the right-wing AGs work to dismantle worker protections and reduce workers’ pay, there are 20 other AGs, led by Illinois, along with advocates, seeking to defend workers and the law in these cases. And we have filed five briefs in four different courts on behalf of a broad coalition of economists, researchers, unions and labor advocates affirming that the federal contractor minimum wage is not only legally sound, but also reduces income inequality and racial and gender wage inequities for the workforce.
While this fight is far from over, the victory in Arizona demonstrates that accountability for political gamesmanship at the expense of workers is possible.