It sounded so good when it was said that the federal minimum wage will be increased to $15 as it hasn’t been changed from $7.25 since 2009. The proposed $15 is more than double the current rate therefore a huge help to minimum wage earners. However this scenario doesn’t seem right to construction companies where most workers earn more than $15. One major concern is the ability of the employers to have such a huge blow in their budget. Given the recent unprecedented events, construction companies will find it hard to oblige unless they will resort to layoffs. If the government will impose such a rule, the businesses will turn to a hard decision of minimizing their workforce.
In 2009, the Congressional Budget Office (CBO) discovered that based on the median estimate that 1.3M would lose their jobs while 17 million who are earning below $15 will benefit from the pay increase. These numbers are independent of how the employers would react thus purely estimates. Another issue being faced is the increased budget requirement for wages in government-funded projects would demand a larger chunk in the national budget. This means larger deficit spending for the national government.
In a recent article featured in The Construction Dive, the impact of a $15 minimum wage has been discussed in detail. They write: “It’s obvious that the increase would help minimum wage workers, but, in an industry like construction where skilled workers often make more than $15 an hour, how would it impact construction businesses?”