Rebutting False Claims
About a Residential Construction Worker Minimum Wage
CLAIM:
A construction worker minimum wage will significantly raise construction costs and lead to the development of less housing.
REALITY:
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The evidence suggests otherwise—L.A. currently pays among the lowest wages to construction workers of any big city in the country adjusted for inflation, and yet has among the highest building costs anywhere in the country. Construction worker wages are a very small percentage of the cost of building housing—only 14% of total affordable housing costs in California go to paying construction workers.
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Increasing residential construction worker wages won’t significantly increase construction costs or lead to fewer workers being employed due to the relatively low cost of the labor.
CLAIM:
The construction workforce in deeply Democratic Los Angeles is already paid well with union protections.
REALITY:
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Construction is a bifurcated industry, separated into two sectors with different working conditions: a high wage, often unionized nonresidential construction sector, and a low-wage, often exploitative residential construction sector.
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The vast majority of the residential construction workforce that this motion applies to is low-income and victims of wage theft. Many workers in this sector are undocumented immigrants who are at high risk of exploitation.
CLAIM:
The City should focus on enforcing existing labor laws that are ignored, not enacting a construction worker minimum wage
REALITY:
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This is a false dichotomy; why can't we do both? A new minimum wage and private right of action with very little cost to the city would not discourage union growth. This motion asks the city to explore increased enforcement and a private right of action, not just a residential construction minimum wage.
CLAIM:
A residential construction worker minimum wage will drive employers to try to avoid paying the new wage by hiring mostly underground
REALITY:
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This situation is sadly already commonplace in the industry. A private right of action will enable workers who are withheld pay or paid under the table to seek recourse from their employers.
CLAIM:
The City of Los Angeles is not dealing with a worker shortage; there are plenty of available construction workers
REALITY:
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A recent study showed we need roughly 50,000 more residential construction workers just to rebuild from the catastrophic fires, let alone our pre-existing housing needs.
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If we don’t prioritize recruiting and retaining our workforce, there will be no recovery or new housing anytime soon.
CLAIM:
A construction worker minimum wage would undermine prevailing wage jobs by creating a “target” or a “ceiling” rather than a floor, leading to employers paying higher-paid workers less.
REALITY:
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There is no evidence that past wage increases have had this effect. For example, after California passed a Fast Food worker minimum wage of $20 per hour, higher-paid workers who were already making more than that minimum wage saw their wages increase, not decrease.
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The residential construction worker minimum wage would only apply to a sector that currently has no prevailing wage.
CLAIM:
Establishing a floor for an industry that currently doesn't have one would legitimize employers who only hire non-union workers and create a parallel system that rewards these employers.
REALITY:
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Creating a floor would not legitimize bad actors; it would delegitimize them by establishing a floor below which their business model can't operate. Those who cannot afford to pay the new wage will either be forced to adapt, be run out of business, or face a greater possibility of being caught breaking the law through the establishment of the right of private action.
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This parallel system already exists and the easiest way to narrow the gap is to raise wages for nonunion workers. While the ultimate goal of organizing every worker is important, we can raise the floor right now without undermining that ultimate goal of union membership.