2.4% Increase in the Contractor Minimum Wage -- A Comment on Inequality....

"An imbalance between rich and poor is the oldest and most fatal ailment of all republics." --Plutarch

Bloomberg reports that “Federal contractor employees will get a minimum wage increase Jan. 1, the Labor Department said. The hourly wage floor will rise from $10.35 to $10.60. Businesses employing workers who earn tips will be able to pay a $7.40 minimum as long as the gratuities carry their hourly earnings up to $10.60. The current tipped minimum is $7.25 for employees of contractors.” See https://www.bna.com/federal-contractor-employees-n73014482194/. [BTW, how come Bloomberg gets tipped off on economic news before it is published in the Federal Register?]

Nonetheless, taking Bloomberg at face value, apparently the Contractor Minimum Wage goes up by 2.4%.  It is, of course, an automatic increase mandated by President Obama Executive Order. The Trump Administraation is no fan of minimum wage increases. Meanwhile, the Fair Labor Standards Act (“FLSA”) minimum wage remains stuck at $7.25, requiring as it does an act of Congress to raise the amount. And the dollar threshold for the FLSA and Service Contract Act (“SCA”) white collar exemptions remains mired at $450 a week, requiring a change in the American judiciary and a perhaps new administration. Yes, DOL is planning on holding some more townhall style meeting on Part 541 regulatory reforms, but when it comes to action, things are slim pickings. And who says elections don’t matter? 

The funny thing about the new $10.60 Contractor Minimum Wage threshold is that it impacts comparatively few workers. Most nonexempt government service contract employees get higher wages due to the SCA coverage which usually mandates more including fringe benefits. And most construction workers on federal contracts get Davis-Bacon Act wages.  Supply and manufacturing workers are exempt. Accordingly, the actual number of workers impacted by this minimum wage increase is comparatively miniscule. And that is the way things likely stay, unless and until the people demand otherwise.

If you don’t like it that way, perhaps you ought to think about actually voting the next time around.