J&J execs get pay raises, but only after bruising shareholder 'Vote No' campaign

By Jessica DiNapoli and Ross Kerber 

CNBC 4/26/2021

© Reuters/Mike Blake FILE PHOTO: A Johnson & Johnson building is shown in Irvine, California

NEW YORK/BOSTON (Reuters) -Roughly 57% of investor votes cast backed healthcare company Johnson & Johnson's executive pay for 2020, a low level of support for a proposal most shareholders usually rubberstamp.

The low support, not including abstentions, for the non-binding proposal comes after the Office of the Illinois State Treasurer urged other shareholders to vote "No" on the company's pay practices, namely because J&J sets aside certain litigation costs when calculating executive compensation, including from the U.S. opioid epidemic.

J&J did not immediately respond to a request for comment on Monday.

Proxy advisors Glass Lewis and Institutional Shareholder Services Inc also recommended against J&J's pay. Johnson & Johnson had said it has always excluded certain one-time costs in its compensation for top brass.

"This vote demonstrates the significant disapproval among Johnson & Johnson shareholders," said Illinois State Treasurer Michael Frerichs in a prepared statement. "This vote sends a strong message to the company that executives should be accountable for all consequences of corporate conduct."

Other companies facing low say-on-pay support have said they would change their executive compensation structures in the future.

Drug distributor Cardinal Health Inc has said it will engage with shareholders to incorporate their views in its executive compensation plan after a minority of them revolted in November against a executive pay structure similar to J&J's.

Walt Disney Co in 2018 adjusted the compensation of then-CEO Bob Iger after 52% of shareholders rejected his pay, Reuters has reported.

(Reporting by Jessica DiNapoli in New York and Ross Kerber in Boston; Editing by Karishma Singh)

CRIMINAL CAPITALI$M

SolaFide Esports owner banned from competitive League for 3 years after not paying players

Michael Kelly 
4/26/20-21

© Provided by Dot Esports

SolaFide Esports owner Colin “Oddity” Ethan has been banned from all Riot-sponsored esports events after failing to pay the members of his League of Legends team, Riot announced today.

The ban, which serves as a retroactive three-year restriction, will last until Jan. 1, 2024. Until that point in time, Oddity will be unable to participate in any and all Riot-sanctioned esports leagues.

“SolaFide Esports had not paid the agreed upon wages of its players, coaches, and management staff,” Riot said. “Furthermore, Oddity did not fulfill his obligations and commitments to Team Members regarding payment and withheld prize money from SolaFide players and coaches. The LCS views this as conduct beyond the confines of the best interests of Proving Grounds and other Riot-sanctioned leagues.”

As a result of Riot’s competitive ruling, SolaFide has ceased its operations in professional League, according to a tweet posted by Oddity. The SolaFide brand would have been able to continue competing in professional League if the organization was willing to make a transfer of ownership.

“With the strenuous complications caused by Covid-19 felt by many, here at SolaFide we have also been affected,” Oddity said in his own statement. “Unfortunately, this coupled with the inability to transfer funds internationally has caused us significant accounting issues which has made us unable to pay out our contracts in a timely fashion.”

SolaFide Esports featured several former LCS pros, including Dhokla, Tuesday, Apollo, and Zeyzal. The team’s players disbanded its roster on March 18 in opposition of the organization’s lack of sufficient payment.

Unsealed Soviet archives reveal cover-ups at Chernobyl plant before disaster

KYIV (Reuters) - The Soviet Union knew the Chernobyl nuclear plant was dangerous and covered up emergencies there before the 1986 disaster, the Ukrainian authorities said as they released documents to mark the 35th anniversary of the accident on Monday.

© Reuters/GLEB GARANICH FILE PHOTO: Children's beds

 are seen in a kindergarten near the Chernobyl Nuclear Power Plant

 in the abandoned city of Pripyat


After a botched safety test in the fourth reactor of the plant, located in what was then Soviet Ukraine, clouds of radioactive material from Chernobyl spread across much of Europe in what remains the world's worst nuclear disaster.

The archives show there was a radiation release at the plant in 1982 that was covered up using what a KGB report at the time called measures "to prevent panic and provocative rumours", Ukraine's security service (SBU) said in a statement on Monday.

There were separate "emergencies" at the plant in 1984, it added.

"In 1983, the Moscow leadership received information that the Chernobyl nuclear power plant was one of the most dangerous nuclear power plants in the USSR due to lack of safety equipment," the SBU said.

When a French journalist collected water and soil samples from the Chernobyl area after the accident in 1987, the KGB swapped the samples for fake ones in a special operation, the SBU cited another KGB report as saying.

Unsealed Soviet archives reveal cover-ups at Chernobyl plant before disaster

Thirty-one plant workers and firemen died in the immediate aftermath of the 1986 disaster, mostly from acute radiation sickness.

Thousands more later succumbed to radiation-related illnesses such as cancer, although the total death toll and long-term health effects remain a subject of intense debate.

The present day government in Kyiv has highlighted the Soviet authorities' bungled handling of the accident and attempts to cover up the disaster in the aftermath. The order to evacuate the area came only 36 hours after the accident.

"The 35th anniversary of the Chernobyl tragedy is a reminder of how state-sponsored disinformation, as propagated by the totalitarian Soviet regime, led to the greatest man-made disaster in human history," the foreign ministry said.

(Reporting by Matthias Williams, editing by Estelle Shirbon)

Montreal dockworkers strike as federal government mulls back-to-work legislation

Video: Ottawa intervenes to avert Port of Montreal strike (Global News)

MONTREAL — Operations at the Port of Montreal came to a halt after more than 1,000 dockworkers began a strike Monday morning, causing a complete shutdown at the facility.

© Provided by The Canadian Press

Lisa Djevahirdjian, a spokesperson for the Canadian Union of Public Employees (CUPE), said negotiations are ongoing, but workers are disappointed to hear that Ottawa is considering back-to-work legislation.

“Obviously, workers are not happy because they want to negotiate, the point is to negotiate a deal,” Djevahirdjian said.

“The point the union wants to make is this strike was avoidable,” she said, adding the strike eventually took place because of pressure tactics from the employer.

Workers at the port have been without a contract since December 2018, and started to refuse overtime and weekend work earlier this month. The union previously enacted a 10-day strike in August.

On Sunday, federal Labour Minister Filomena Tassi said Ottawa has filed notice that it will table back-to-work legislation if the stoppage isn't resolved in the coming days.

She said the government doesn't want to intervene but may have no choice but to prevent potentially long-lasting harm to the economy if the strike continues.

"The Port of Montreal is critical to the economic well-being of Canadians across the country, particularly those in Quebec and Eastern Canada," said Tassi in a statement on Twitter.

"The government must act when all other efforts have been exhausted and a work stoppage is causing significant economic harm to Canadians."

Conservative Leader Erin O'Toole didn't close the door to supporting legislation to resolve the impasse.

"We're going to talk with unions, companies and exporters because it's important to have a solution," he said. "There is a serious risk to our economy with a strike of several days. We must find a solution and examine the bill.”

Meanwhile, New Democratic Party deputy leader Alexandre Boulerice said it was the employer and the union that needed to find a solution at the bargaining table.

“By interfering in the negotiation process, the Liberals are destabilizing the balance of power between workers and their employer for good,” said Boulerice. “The employer's position is strengthened and they will no longer have any incentive to settle the labour dispute.”

The Port of Montreal saw a dip in activity as early as last month, as customers sought other ports to export and import from ahead of the strike.

Several employers groups have raised concerns about the impact of the strike on business.

Canadian National Railway said customers began to divert freight several weeks in anticipation of a second strike in about six months that previously caught shippers and importers by surprise.

Railway CEO Jean-Jacques Ruest said it received additional business from the last strike but also unplanned costs and disruption to its own operations.

The impact this time shouldn't be substantial, he said, noting that Ottawa is considering legislation to end the strike or prompt a resumption of negotiations.

"All in, it's not a big to-do in terms of our second-quarter results," he told analysts during a conference call about first-quarter results.

The Canadian Chamber of Commerce welcomed the government’s plan to table back-to-work legislation.

“The prospect of a second strike in seven months has disrupted supply chains in all industries and hampered Canada’s economic recovery at a time of severe downturn,” said Perrin Beatty, the chamber's chief executive.

“We call upon all members of Parliament to pass the bill expeditiously to prevent the serious damage a strike would have on jobs and on Canada’s economic recovery.”

This report by The Canadian Press was first published April 26, 2021.

The Canadian Press

Biden's 100-day stock market performance is the hottest going back to the 1950s

Jeff Cox 

CNBC

4/26/2021

President Joe Biden has witnessed an unprecedented growth on Wall Street in his first 100 days in office, better than any of his predecessors going to at least Dwight Eisenhower.

Massive stimulus and a booming economy, both of which were underway well before he took office, have helped propel the market.

If anything, the market's main worry may be that it's moving too fast and a policy mistake could slow it down.

© Provided by CNBC U.S. President Joe Biden speaks during an event with the CEOs of Johnson & Johnson and Merck at the South Court Auditorium of the Eisenhower Executive Office Building March 10, 2021 in Washington, DC.

So far in his young presidency, President Joe Biden has been one of the best friends the stock market has ever had.

Better, in fact, than any president before him going back to at least the 1950s and the Dwight Eisenhower administration, as the 46th chief executive has witnessed an unprecedented growth on Wall Street in his first 100 days in office as measured from the time of his election.© Provided by CNBC

How long that cozy relationship will last is about to be determined, as investors have to digest a slew of potential obstacles from tax policy, regulations associated with Biden's ambitious climate agenda, and the threat of overheating in an economy already on fire.

But so far, investors have shown no hesitance in making huge bets on corporate America.

"Biden's first 100 days have already delivered the strongest post-election equity returns in at least 75 years, due to record fiscal stimulus and despite heavy use of Executive Orders," JPMorgan Chase strategist John Normand said in a note. The results are "not bad for some [former President Donald] Trump labeled as Sleepy Joe during the campaign."

Indeed, Biden's results have been staggering so far.

The S&P 500 has risen 24.1% since Election Day with numbers that easily trounce any of his predecessors.

The only administration going back to 1953, or the beginning of Eisenhower's term, to rival Biden's were those of John F. Kennedy, who saw an 18.5% rise during the same period.

Even Trump, who often touted how well stocks were doing, saw just an 11.4% rise for the first 100 days.© Provided by CNBC

To be sure, judging results that early in a presidency is tricky. In Biden's case, it's especially difficult to gauge whether the market was reacting to him specifically or simply continuing to ride the steam locomotive that began in late March 2020 and has shown only sporadic signs of slowing down since.

"Anyone that became president this year was going to have a pretty significant tailwind," said Art Hogan, chief market strategist at National Securities. "You're coming into a point where you had to just not mess things up, and hopefully improve on what it was you needed to get done."

No president, in fact, had a tailwind comparable to what Biden was handed in January.

Congress already had appropriated more than $3 trillion in stimulus and the Federal Reserve had relaxed policy to the loosest point in the central bank's history. All told, more than $5.3 trillion has been spent on Covid-related relief efforts, and the Fed's bond purchases have nearly doubled its balance sheet to just shy of $8 trillion.

With possibly trillions more coming in spending on infrastructure, a term that congressional Democrats have paint with a generously broad brush, that gives forward-looking investors even more reason to plow money into the market.

On top of that, the U.S. is still vaccinating about 3 million people a day, adding hopes that growth will continue as more of the economy comes back to life ahead.

"It will be intriguing to see what the next 100 days looks like," Hogan said. "There's a significant tailwind for reopening. The tug-of-war between the virus and vaccine is finally being won by the vaccine."
What could go wrong

Still, there's plenty to watch ahead as the sizzling bull market tries to rage on.

After all, the S&P 500 is up about 48% from a year ago, and it hasn't had a meaningful pullback in more than six months. From November through March, investors poured more money into equity-based funds than they did in the previous 12 years, according to Bank of America.

Moreover, some 96% of the components in the all-encompassing Wilshire 5000 have seen positive returns in the past 12 months, which Hogan said is a record and has come despite more volatility than usual, particularly in the past few months.

© Provided by CNBC

"For sure, I would get concerned about going too far, too fast," Hogan said. "But the corrections seem like they're happening on a rotational basis instead of an index basis. At some point in time, there will be something that gums this up."

Markets have continued to push higher even knowing that Biden has pinned a bull's eye on the nation's richest earners as well as corporations, with both groups expected to see substantially higher tax bills ahead.

Concern remains, though, over policy mistakes in other areas.

All that stimulus has resulted in a $1.7 trillion budget deficit through just the first half of fiscal 2021, raising concerns over how all that red ink will be financed.

At the same time, the Fed has said it will not start tightening until it seems inflation that runs above its traditional 2% target for a considerable period of time as it takes aim at a goal of both full and inclusive employment.

Mohamed El-Erian, chief economic advisor at Allianz, said that "outcomes-based" approach to monetary policymaking is a mistake, particularly with inflation clearly on the rise. El-Erian told CNBC that "massive liquidity and a significant pickup in the economy recovery" are propelling the markets and should continue to do so unless there's "either a policy mistake or some sort of market dislocation."

One area he is watching is the Fed, which meets this week.

The policymaking Federal Open Market Committee is almost certain not to change policy or even indicate that interest rate hikes or a slowdown in asset purchases are anywhere on the horizon. El-Erian said he'd like to see a gradual tightening that starts soon.

"The risk of falling behind is high. Then you have to slam on the brakes," he said on "Squawk Box." "That's the one thing that can really disrupt the markets, if we get them slamming the brakes. So I would rather see them slowly tap the brakes now than have a very high risk of them slamming the brakes down the road."

While Fed officials have characterized the higher inflation numbers recently as temporary, El-Erian said supply-driven inflation, like with semiconductors and a number of consumer goods, indicates that may not be the case.

"I'm really worried that what they hope is transitory inflation is going to end up being persistent inflation," he said. "If we end up in a persistent inflation world, they're going to have to slam on the brakes, and the market reaction then will be much worse than it would be if they just tapered a little bit now."

Biden plans to beef up IRS to claim up to $700bn in tax from richest Americans
Edward Helmore in New York 
THE GUARDIAN 4/27/2021

Joe Biden plans to give tax collectors an extra $80bn to seek as much as $700bn in new revenue from high earners and large corporations, as part of the “American Families Plan” set to be unveiled this week.

© Provided by The Guardian Photograph: Evan Vucci/AP

Separately, the White House announced overnight that Biden will issue an executive order requiring federal contractors to pay a $15 minimum wage to workers on federal contracts.

Enhanced tax enforcement by the Internal Revenue Service (IRS), coupled with new disclosure rules, could raise $700bn over the next decade from wealthy people and privately-owned businesses, according to unidentified administration officials speaking to the New York Times.

The additional funding represents an increase of two-thirds over the agency’s entire funding levels for the past decade.

In a statement, the administration said the new federal wage floor “will promote economy and efficiency in federal contracting, providing value for taxpayers by enhancing worker productivity and generating higher-quality work by boosting workers’ health, morale, and effort”.

“The executive order ensures that hundreds of thousands of workers no longer have to work full time and still live in poverty. It will improve the economic security of families and make progress toward reversing decades of income inequality,” it said.

The measures come ahead of a major policy speech before a joint session of congress on Wednesday in which Biden is expected to frame raising taxes on wealthy Americans employing sophisticated schemes to lower tax exposure and closing corporate loopholes as a way of leveling the tax burden between middle and lower earning Americans and the wealthy.

As part of the new tax structure, the administration plans to raise the top income tax rate to 39.6% from 37% and raising capital gains tax rates on those who earn more than $1m a year. Tax rates will also be raised on income for people earning more than $1m per year through stock dividends.

Earlier this month, IRS commissioner Charles Rettig told a Senate committee that tax cheats cost the government as much as $1tn a year and the agency lacked the resources to enforce the tax code. Biden, it is widely reported, plans to use additional money raised by a crackdown to help pay for his “American Families Plan.”

But higher taxes face a pushback from Silicon Valley and Wall Street. Administration sources told the Financial Times that capital gains tax rise will hit only the richest 0.3% – a “sliver” of the US population.

Conversely, the White House has said that raising the minimum wage for hundreds of thousands of workers on federal contracts is “critical” to the functioning of the federal government “for cleaning professionals and maintenance workers who ensure federal employees have safe and clean places to work, to nursing assistants who care for the nation’s veterans, to cafeteria and other food service workers who ensure military members have healthy and nutritious food to eat, to laborers who build and repair federal infrastructure”.

Any decline in the stock market because of higher capital gains taxes will likely be short-lived, according to Goldman Sachs

mfox@businessinsider.com (Matthew Fox) 

4/26/2021

 Xinhua/Wang Ying/Getty Images Xinhua/Wang Ying/Getty Images

President Biden's proposed capital gains tax hike could weaken the stock market in the short-term, according to Goldman Sachs.

However, in the long-term, stocks have trended higher six months after previous capital gains tax hikes, Goldman said.

"We estimate $1+ trillion in unrealized capital gains for the wealthiest US households, but also large cash balances that should support equity demand," Goldman said.

A proposed capital gains tax hike by President Joe Biden is nothing the stock market can't handle, according to a Friday note from Goldman Sachs' David Kostin.

Stocks initially sold off 1% last Thursday after news broke that Biden will propose nearly doubling the capital gains tax rate to 39.6% for those making more than $1 million annually, but those losses were recovered on Friday.

That's the type of market action investors should expect if the tax proposal does pass: an initial sell-off followed by a longer-lasting rally.

Kostin's analysis of previous capital gains tax hikes found that S&P 500 declines tend to materialize prior to the capital gains tax hike as those impacted lock in their gains at a lower rate, but those declines are short-lived.

"The trend of net equity selling and falling stock prices around capital gains rate changes has usually been short-lived and reversed during subsequent quarters," Kostin said.

Goldman estimates that the wealthiest households own $1 trillion to $1.5 trillion in unrealized equity capital gains, or about 3% of the total US equity market cap.

But when the capital gains tax increased in 2013, "although the wealthiest households sold 1% of their assets prior to the rate hike, they bought 4% of starting equity assets in the quarter after the change and therefore only temporarily reduced their equity exposures in order to realize gains as the lower rate," Kostin explained.

And stocks can still go higher with US households sitting on a meaningful pile of cash, with net equity buying by households totaling $350 billion in 2021. That buying will be driven by the wealthiest 1%, according to Goldman, continuing a decades long trend.

According to Goldman, the top 1%, which accounts for 53% of household equity ownership, has bought $2 trillion of shares over the past 30 years compared to $800 billion in net selling by the bottom 99%

.

© Goldman Sachs Goldman Sachs

Read the original article on Business Insider

<1%

Biden capital gains tax hike would only hit 0.3% of households, White House advisor says

It's "not the top 1%, it's not even the top one-half of 1%," Deese said from the White House. "For the other 997 out of 1,000 households in the country .. this is not a change that will be relevant."

Thomas Franck 

CNBC 4/26/2021

President Joe Biden's top economic advisor defended a plan to raise the capital gains tax as neither too large a burden nor a barrier to business investment.

Brian Deese, director of the National Economic Council, said the plan would raise the capital gains tax for 0.3% of households, those that make more than $1 million.

"For the other 997 out of 1,000 households in the country ... this is not a change that will be relevant," Deese told reporters.

President Joe Biden's top economic advisor on Monday defended a plan to raise the capital gains tax on the nation's wealthiest households as neither too large a burden nor a barrier to business investment.

Brian Deese, director of the National Economic Council, said during a news conference that the president's plan would raise the capital gains tax for 0.3% of U.S. households — those that make more than $1 million in annual income.

Play Video
Capital Gains tax increase would impact 0.3% of taxpayers: WH




It's "not the top 1%, it's not even the top one-half of 1%," Deese said from the White House. "For the other 997 out of 1,000 households in the country ... this is not a change that will be relevant. It won't change the tax treatment of capital gains at all."

He explained that the proposed tax increase would target those households that do not typically derive the majority of their income through workplace wages.

"For the typical Americans, most of their income comes from wages," he said. "So, for people making less than $1 million a year, about 70% of their income comes from wages. But for those making more than $1 million, for the top 0.3%, it's the opposite. About 30% of their [income] comes from wages."

Though Deese did not mention a specific rate, his appearance Monday during a White House briefing lent credibility to reports that the administration will seek to hike the capital gains rate to 39.6% for households making more than $1 million.

Video: Historically, there is little to no relation between capital gains taxes and market returns, says UBS' CIO for Americas (CNBC)

Biden is expected to formally debut the proposal on Wednesday as a way to fund spending in the upcoming American Families Plan, thought to feature a price tag of around $1 trillion.

That piece of legislation, separate from the infrastructure-based American Jobs Plan, is believed to include measures aimed at helping U.S. workers learn new skills, expand subsidies for child care and make community college tuition free for all.

Asked to address criticism that raising the capital gains rate could dampen investment in U.S. business, Deese argued that there's no evidence to support that claim. The capital gains tax is especially important to Wall Street since it dictates how large a chunk of an equity sale is collected by the federal government.

"Across a wide body of academic and empirical evidence, there is no evidence of a significant impact of capital gains rates on the level of long-term investment in the economy," he said. "There's lots of reasons for that, including that, if you look at where a lot of venture capital and early stage investment comes from, it actually comes from pension funds, wealth funds, entities that actually are not tax sensitive."

Deese also contended that the revenue generated by a higher rate on the richest Americans could then be deployed in programs and subsidies that have been shown to increase economic output over time.

"Investments, for example, in early childhood and in our children return enormous dividends in terms of their own academic success, reduced cost in the health-care system, productivity and growth in the future," the NEC director and former Obama official told reporters

Stimulus: Dems Push Bill to Make $300 Monthly Checks to Parents Permanent—Will Biden Support It?

Christina Zhao 

NEWSWEEK

4/27/2021

House Democrats on Monday introduced a bill that would make the monthly $300 child tax credit expansion in President Joe Biden's $1.9 trillion American Rescue Plan permanent. However, the president doesn't think the legislation could pass the Senate and is unlikely to support it.

© Al Drago/Getty Images President Joe Biden delivers remarks during a virtual Leaders Summit on Climate with 40 world leaders at the East Room of the White House April 22, 2021 in Washington, DC.

The measure was unveiled by Reps. Rosa DeLauro of Connecticut, Susan DelBene of Washington and Ritchie Torres of New York, according to Insider.

In a statement, DeLauro said, "We must use this moment to pass the American Family Act and permanently expand and improve the child tax credit by increasing the benefit to families and providing payments monthly. Children and families must be able to count on this benefit long after the end of this pandemic."

Biden's $1.9 trillion stimulus package, signed into law in March, expanded 2021 child tax credits to $3,000 for each child aged between 6 and 17 and $3,600 for each child under the age of 6.

Under the law, the IRS can send the payments as monthly $250 or $300 checks, depending on the age of the child. Single parents earning $75,000 or less and couples earning $150,000 or less are entitled to receive the full amount. The larger figure is reduced for those that earn over the threshold.

Earlier this month, IRS Commissioner Charles Rettig said that administrators were on track to begin issuing the checks in July.

Last Tuesday, Democratic Rep. Teresa Leger Fernandez of New Mexico said Biden disparaged calls to make the extended tax credit permanent in a meeting with lawmakers from the Congressional Hispanic Caucus.

"He said, 'I'd love to do it permanent, but I'm not sure that I can get that through the Senate," Leger Fernandez said, according to the Wall Street Journal. "You could tell he was interested in making it permanent, that was the back and forth on that."

Democrats used a budget process called reconciliation to pass the latest stimulus bill through Congress without GOP support. But the process can only be used once every fiscal year. With vaccines being rolled out, it's unlikely that the Biden administration would want to use reconciliation when it becomes available after October 1 for further stimulus measures.

Three unnamed sources briefed on Biden's American Families Plan recently told the Washington Post that the upcoming proposal will extend child tax credits until 2025. But the sources also warned that the plan could change before its release to the public.

Newsweek reached out to the White House for comment. This story will be updated with any response.

Biden to mandate $15 minimum wage for federal contract workers
4/27/2021

The official also said that Biden's Council of Economic Advisors reviewed the order and did not conclude that requiring a higher wage would lead to any job loss.

Although U.S. President Joe Biden was unable to get a $15 minimum wage provision included in his COVID-19 relief package, he's making good on that campaign promise for one group of people: federal contract workers.


Biden will sign an executive order on Tuesday increasing the minimum wage to $15 an hour for hundreds of thousands of people who are working on federal contracts.MORE: Biden's 1st 100 days: Promises kept, broken, or in progress

However, the raise won't kick in immediately. The executive order states that all federal agencies will need to implement the $15 minimum wage in new contracts by March 30, 2022. It's difficult to amend existing contracts, but wages can be changed when they are up for annual review.

Currently, the minimum wage for federal contract workers is $10.95. It was raised to $10.10 under U.S. President Barack Obama in 2014 and later indexed to inflation.

Many federal contract workers make more than the current minimum wage. But the pay bump will give an extra boost to lower-wage workers like cleaning and maintenance professionals, food service employees on military bases and in government buildings, as well as nursing assistants who care for the nation's veterans.

The White House could not provide an exact number of how many federal contract workers will ultimately see a raise because of the executive order, given the constantly-changing nature of federal contracts.MORE: Infuriated by Dems dropping minimum wage hike, progressives say 'time for wealth tax'

The Biden administration said a higher minimum wage will not cost taxpayers by making federal contracts more costly. Citing a study by Harvard University, a White House official said paying such a competitive wage ensures reduced turnover, absenteeism, training and supervisory costs as well as lower recruitment, all of which will increase productivity, cut costs and ultimately zero out any increased costs for taxpayers.

The official also said that Biden's Council of Economic Advisors reviewed the order and did not conclude that requiring a higher wage would lead to any job loss.

ABC News' Morgan Winsor contributed to this report.