Increased Minimum Wages & Decreased Workforce Pose Challenges

By Marshall Hook

As we approach the final quarter of 2019, a variety of challenges continue around developing and maintaining a solid and reliable workforce. Among those are new minimum wages going into effect in both New York State and Connecticut, as well ongoing restrictive immigration policies that are having a direct effect on the labor pool in the building service contractors (BSC) industry and others, like landscaping and food service.

Both New York and Connecticut have enacted plans to raise minimum wages on a gradual basis until they reach $15 an hour.

New York’s mandate, which began in 2016, requires annual increases by the end of each calendar year. As of the start of 2019, the minimums in effect sat between $11.10 and $15, depending on the size and location of the business. Those with 11 or more employees in New York City achieved the $15 mark at the end of 2018. Smaller business in NYC must get there by the end of this year; Long Island and Westchester by 2021. All other parts of the state will be at $12.50 by the end of 2020 and will continue annual increases on a schedule to be released by the Commissioner of Labor on or before October 1. (Note: There are some exceptions to this schedule for fast food workers and tipped food service workers.)

In Connecticut, the wage increases will apply equally across the state, regardless of location or business type. The first increase to $11 goes into effect on October 1, with incremental dollar increases every year until wages reach $15 on June 1, 2023. After that date, the law requires that the minimum wage becomes indexed to the U.S. Department of Labor’s employment cost index.

At the same time that the cost of labor is increasing, the available pool of workers is shrinking. Some of this can be traced to increasingly restrictive and aggressive immigration policies at the federal level. According to a recent CNN report, workers across the country are not showing up to work for fear of possible raids by the Department of Immigration and Custom Enforcement (ICE).

AffinEco Managing Partner Michael Diamond became president of the Building Service Contractors Association International (BSCAI) in January of this year. One of his top priorities has been to improve how the Association communicates to policymakers so they have a broader understanding of the connection between the current labor crisis and immigration issues.

“We respect the need to fix the broken federal immigration system, but we also need immigrants to be able to come here legally and work,” said Diamond. “The challenge is finding an effective solution that addresses the former and supports the latter.”

As BSCAI’s director of government affairs, Kevin McKenney is working to connect employers directly with their representatives in Washington, DC in an effort to convince the politicians to alleviate the situation. He said that labor shortages have shot up the list of concerns across many labor and trade industries.

“A few years ago, the top concerns would have been more on the business side of things, economic policy or tax policy, for example,” McKenney said. “Those are still important, but now labor – and specifically concerns about immigration policy – have moved front and center.”

McKenney emphasized the most promising way to effect change is for business owners to get in front of their members of Congress and have their voices heard directly. While lobbying plays a role in educating policymakers on important issues, he said nothing can replace first-person communication.

“In most cases members of Congress really like hearing directly from constituents. They really enjoy hearing personal stories coming directly from the membership of an association or somebody involved in the industry,” he said. “Having a personal connection between an employer who can talk about something like how many jobs they have in that district – these are key pieces of information that really cause their ears to perk up. The grassroots advocacy side is a really important component to the broader overall government affairs strategy.”

With that in mind, BSCAI is launching the Grassroots Action Center, an online tool designed for members to easily find ways to directly address and interact with their representatives on immigration policy.

“You’ll be able to take action within just a few clicks. It will be a really convenient and easy way for BSCAI members to help educate members of Congress on these concerns,” said McKenney. “They are most sensitive to the concerns of constituents – and particularly employers – and if you’re feeling really challenged in this current climate, now is the time to get involved.”

Image courtesy of Omaha Jobs