The Trump administration’s latest attack on federal workers rolls back minimum wage protections, slashing Biden-era pay standards that could affect hundreds of thousands of employees working private sector jobs.
On March 14, President Donald Trump reversed a series of executive orders issued by the previous administration, including Executive Order 14026, which raised the minimum wage to $15 per hour and adjusted for yearly inflation for private sector employees working on federal contracts beginning in 2021.
The wage protections were designed to ensure decent salaries for contracted workers. Under the new policy change, private companies can reduce wages for these employees without regulation from the U.S. Department of Labor. The new minimum wage of $13.30 per hour, based on an older Obama-era rule, has a pay cut of up to 25%, according to the White House and the Center for American Progress.
The Trump administration said the move is “necessary to advance the policy of the United States to restore common sense to the Federal Government and unleash the potential of American citizens.”
The federal government has used its contracting system to set fair wages and working conditions for private sector workers providing goods and services, including military uniforms and office maintenance, which raises standards for minimum wage policies, per CAP.
According to The HR Digest, an estimated 390,000 to 600,000 private sector workers will be affected by the 25% pay cut in industries like construction, concessions, federal lands and other government areas. Private companies with existing contracts will maintain the current minimum wage until those agreements end, but workers under future federal contracts will be paid the reduced rate of $13.30 per hour.
The federal minimum wage remains $7.25 per hour since it was enacted on July 24, 2009, per the DOL. While the new wage standards are higher, many federal contract workers will still feel the cut’s impact, as the previous $17.75 minimum provided a better salary and encouraged more people to apply for government positions.
Trump’s federal worker cuts could impact the nation’s two wealthiest Black counties with median household incomes exceeding $100,000: Charles and Prince George’s counties, part of the Southern Maryland region.
“The revenue has decreased significantly,” Herb Banks, owner of Copper Compass Distillery in the Waldorf area of Charles County, said.
According to The Baltimore Banner and U.S. Census data, the federal government employs approximately 1 in 5 Black workers in the area.
“This could have devastating effects across these communities,” Duke University economist William A. “Sandy” Darity told the outlet.
