Public Dollars and Living Wages

The Trump administration has rolled back yet another baseline federal protection for workers.  

President Trump recently rescinded executive orders that compelled the federal government to use public dollars to create good jobs. Trump revoked Executive Order 14026, which set a minimum wage of $15 per hour for all federal contractors and subcontractors, and Executive Order 14126, which promoted equitable workforce development and family-sustaining wages, preventing workplace discrimination, ensuring worker safety, and allowing workers a free and fair chance to join a union. 

Amid the Trump administration’s headline-grabbing decisions to summarily shut down federal agencies...it would be easy to overlook this administration’s decision to weaken worker protections on federal contracts.

Amid the Trump administration’s headline-grabbing decisions to summarily shut down federal agencies, fire thousands of federal workers, and strip hundreds of thousands of federal workers of their right to collectively bargain (a move unions representing federal workers have already challenged as illegal in court), it would be easy to overlook this administration’s decision to weaken worker protections on federal contracts. But civilian federal agencies spend more than $300 billion annually on contractors (nearly $760 billion when the Department of Defense is factored in), and federal contracting policy has an enormous ripple effect on the quality of jobs in the economy. The federal government's massive purchasing power dictates employment standards for businesses that contract with the government, setting wage floors, benefit expectations, and workplace safety standards. How the federal government spends our tax dollars has the potential to reshape entire industries, creating either jobs with living wages and fair treatment or precarious and exploitative working conditions. 

There are some laws already on the books that address this. Congress has passed legislation to establish the federal government as a model employer over the last century—setting prevailing wage rates under the Davis-Bacon Act in 1931, the Walsh-Healey Act in 1936, and the Service Contract Act in 1965. While those statutes provide critical protections for workers, they still fall short of securing living wages and dignified working conditions for all of the workers supported by federal public dollars. A 2013 analysis found that there are nearly 2 million private sector jobs funded with public dollars that pay wages that hover at the poverty line.  

When legislative attempts to address these inequities stalled in Congress, President Biden issued an executive order in 2021 that set the minimum wage at $15 per hour for all federal contractors, up nearly $5 from President Obama’s 2014 rate. Some estimates found that this would raise the total wages of about 390,000 workers by a total of $1.2 billion annually. Trump’s recent executive order reverses these gains. Federal contractors are once again allowed to offer poverty wages that will deprive hundreds of thousands of low-wage workers of the raises they earned over the last four years. The Trump administration has also announced that it will not enforce the Biden executive order requiring a higher wage rate. This means that federal contractors—who already agreed to pay their workers at least $15 per hour as required by contracts they received under the Biden administration—have a greenlight from the Trump administration to pay their workers less than they had already promised.  

It does not have to be this way. All we need to do is look at what a coalition of labor and community groups has done in Texas to make sure their government contracts create good jobs.  

Starting on July 1, the minimum wage for contracted workers will be $21.65, and it will be updated annually to ensure that it keeps pace with the rising cost of living.

Harris County recently passed a historic living wage increase for all of its contracted workers. Starting on July 1, the minimum wage for contracted workers will be $21.65, and it will be updated annually to ensure that it keeps pace with the rising cost of living. This ensures that county contracts will create living-wage jobs and raise standards across the region.  

More than 5 million people live in Harris County (home to the City of Houston), and it is one of the most racially and ethnically diverse counties in the country. The county also wields significant spending power with an annual budget of $2.6 billion. This minimum-wage policy will improve the living conditions for potentially thousands of Black and brown workers and their families. Community groups, worker centers, and unions—such as NEW Houston, Workers Defense Project, the Texas Organizing Project, SEIU Texas, Communications Workers of America, IUPAT, UNITE HERE, and the Texas Gulf Coast Area Labor Federation—formed a powerful and effective coalition. This victory is even more notable given that this coalition succeeded in a state with some of the conditions most hostile to building power for Black and brown communities and working families. 

Working families often struggle to get by, with inadequate pay, exploitative working conditions, and precarious employment. Black and brown workers suffer these consequences to an even greater extent. A real path to economic security requires that workers earn a wage that allows them to meet their own (and their family’s) social, emotional, and physical needs. The Obama and Biden executive orders were critical steps toward this goal, and they demonstrated how public spending can incentivize high-road employers and protect workers. When workers receive an equitable share of the value they create, they no longer live paycheck to paycheck.  

Organizers in Harris County prove that we do not need to wait until the next federal election to protect workers and empower our communities.

Organizers in Harris County prove that we do not need to wait until the next federal election to protect workers and empower our communities. We have the policy strategies we need to meet the moment and to continue building power at the state and local levels. And, as labor and community organizations in Harris County already showed, power is built from the ground up.