Howard Fischer Capitol Media Services
PHOENIX — The Biden administration says Arizona’s attorney general has no right to second guess, and sue, over the president’s decision to set a $15 minimum wage for employees of federal contractors.
In filings in federal court here, Justin Sandberg, an assistant US attorney, said Congress gave the president “broad powers” to decide the policies for providing goods and services to the federal government. Those include the terms by which it will do business, including how much contractors must pay their workers, he said.
Sandberg said Arizona has no specific interest in the policy that would allow it and a handful of other states to challenge President Biden’s decision. He said claims the policy would somehow affect state revenues are “speculative.”
“And speculative harm does not suffice to sue in federal court,” Sandberg told Judge John Tuchi.
He also suggested that if Attorney General Mark Brnovich thought the president was acting illegally he should have acted long before this, pointing out that similar rules existed under both the Obama and Trump administrations.
People are also reading…
Federal law going back to 1949 allows the president to establish policies for the executive branch he considers necessary to foster an “economic and efficient system” to obtain goods and services.
Using that, Biden issued an executive order last year requiring federal agencies to put a requirement in all contracts that workers be paid at least $15 an hour.
Brnovich filed suit against it, saying the president acted beyond his authority. He noted that Congress rejected an administration proposal in a COVID relief package to increase the federal minimum wage for all workers, now $7.25 an hour, to $15.
Biden did an end-run, Brnovich said, complete with a definition of who is a federal contractor that would sweep in more than 500,000 businesses that employ one-fifth of the entire US labor force.
“Notwithstanding the president’s conviction that he — and not Congress — knows what the appropriate minimum wage should be, he can only act consistent with the law as set out by Congress,” Brnovich wrote.
Sandberg said that’s what Biden is doing.
The order says raising the minimum wage “enhances worker productivity and generates higher-quality work by boosting workers’ health, morale and effort; reducing absenteeism and turnover; and lowering supervisory and training costs.”
“In short, the rule is aimed directly at improving economy and efficiency in government contracting by improving the efficiency of contractors’ employees and thus of the federal government’s contracting operations,” Sandberg said.
He cited a 2003 study that found increased wages paid to workers at San Francisco International Airport “increased productivity and shortened airport lines.” And a 2011 study of full- and limited-service restaurants found “productivity increased due to improved worker morale after a wage increase.”
Brnovich, however, wants the court to focus on what he said are direct impacts on the state.
For example, he said all three state universities have federal contracts, with federal revenues in the 2021 fiscal year topping $1.2 billion. Having to comply with Biden’s order, Brnovich said, will affect those schools — which he said have some workers who earn less than the $15 figure — forcing them to either raise those wages or forego the federal contracts.
He also said there are many private employers with federal contracts.
“Those businesses in turn will have lower taxable income, and hence pay less in taxes to the state treasure,” he said. If companies are forced to lay off workers to keep labor costs down, that will result in more people applying for jobless benefits.
Sandberg said nothing interferes with state sovereign powers, even in cases where state agencies are federal contractors.
A state “can choose to enter into a contract with the federal government on terms that are mutually agreeable or, if no such terms exists, it can choose to forgo a contact,” he said. “Requiring the state to make a choice — even a hard choice — does not infringe on a state’s sovereign authority.”
A hearing on the state’s bid to join the wage requirement is set for July 12.