On February 10, Texas Attorney General Ken Paxton filed a lawsuit against the Biden Administration over Executive Order 14026, which raised the minimum wage for federal contractors to $15.00.
According to a press release, Paxton stated, “President Biden has chosen to ignore the Constitution, federal law, and all evidence showing the adverse effects of imposing a much higher minimum wage for federal contractors. This administration has caused enough problems for our country. I will not allow them to cost Texans valuable jobs and to worsen the economic downturn.”
The states of Louisiana and Mississippi have also joined in the lawsuit with Paxton to sue the Biden Administration.
Biden signed the order in April 2021, and it went into effect on January 30, 2022.
The order states that employees who work under federal contractors will now have a minimum wage of $15.00 per hour with applicable overtime pay as well. This order applies to new and renewed contracts made after January 30, 2022. It does not apply to agreements entered into before that date.
In 2021, the minimum wage for federal government contract employees was $10.95 per hour and was set to increase to $11.25 this year.
The executive order also stipulates that the Department of Labor would have the authority to raise wages yearly.
According to Paxton, Congress has the sole authority over setting the minimum wage and has already declined to raise the federal minimum wage for all workers, which currently sits at $7.25 an hour.
However, Biden’s mandate only applies to federal government contract workers and not to an across-the-board minimum wage increase for all workers.
According to the Insider, Paxton believes raising the wages will cause inflation, a drop in consumption, and unemployment. “States will be burdened with higher unemployment, benefits claims and a deteriorating economy, and young, less educated workers could bear the brunt of this economic disaster,” the lawsuit explained.
With the increase in place, federal contractors’ employees could be paid an estimated $1.7 billion more per year over the next ten years, according to the Department of Labor.
According to the lawsuit, that amount “would either be passed on to consumers or would lead to companies going out of business.”
However, the Economic Policy Institute‘s analysis of Executive Order 14026 found the pay raise would be beneficial for both employees and employers.
“We believe that a federal contractor minimum wage standard of $15 in 2022, with future indexes linked to inflation, will benefit hundreds of thousands of workers and improve the efficiency of the federal contracting system,” the organization said in their report. “Roughly half of workers who would see a raise will be women and roughly half will be Black or Hispanic workers.”
The report also stated that the wage increase would “improve the efficiency of the contracting system,” “lead to reductions in turnover and worker separations,” and improve the quality of federal contract work.
According to CBS DFW, a spokesperson for the White House stated, “The President acted well within his legal authority when he issued this executive order. As a result of raising the minimum wage, the federal government’s work will be done better and faster.”
So the Indicted AG is in favor of not paying a living wage to employees. These businesses should not receive federal contracts if they can afford it.