Trump Said 3 Months Ago Federal Minimum Wages Don't Work—Now He's Slashed Biden's $17.75 Minimum For Federal Contractors To State Minimums

Three months after saying that a one-size-fits-all federal minimum wage “wouldn't work,” President Donald Trump has rolled back a key wage rule affecting federal contractors. The move cancels an executive order from then-President Joe Biden that required contractors to pay their workers at least $17.75 per hour.

Trump’s Take on Federal Wages

Back on Dec. 8, during an appearance on NBC News’ “Meet the Press,” Trump said, "It would be nice to have just a minimum wage for the whole country, but it wouldn't work because you have places where it's very inexpensive to live." He argued that a federal minimum wage could have “very little effect” in some areas due to lower living costs.

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His comments fueled debate over whether the U.S. should have a federal wage floor at all. But as of 2023, only about 1.1% of American workers actually earn the federal minimum of $7.25 an hour, according to the Bureau of Labor Statistics. The vast majority earn more, thanks to higher state minimums and market conditions.

Biden’s $17.75 Minimum Wage for Contractors Repealed

On March 15, Trump formally repealed Biden's 2021 order that had gradually raised the minimum wage for federal contract workers to $17.75 per hour by this past January. That order replaced an earlier rule from President Barack Obama, who had bumped the contractor minimum to $10.10 in 2014 with periodic increases.

Biden's order also removed an exemption for seasonal recreational businesses on federal land—a carveout Trump had supported during his first term. With the repeal, many federal contractors will now fall back to the Obama-era rate of $13.30 or to the base federal minimum of $7.25 per hour, unless higher state minimum wages apply.

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Millions of Workers Could See Pay Changes

According to Reuters, roughly 20% of the U.S. workforce is employed by companies with federal contracts. Critics of Biden’s rule, including some Republicans and business groups, said the $17.75 wage made it harder for small businesses to compete and didn't fit low-cost areas.

But advocates say the change could hurt low-wage workers. “The federal minimum wage has become largely irrelevant,” Chad Gammon, a certified financial planner, told GOBankingRates. He pointed out that the federal rate hasn't budged since 2009. Others warn the rollback may reduce worker protections.

The repeal also wipes out Biden-era rules that favored federal contractors who stayed neutral in union drives or joined registered apprenticeship programs. Trump didn't give a  reason for the changes, but they align with his stated goal of trimming regulations he sees as unnecessary or burdensome.

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