What Will California’s Minimum Wage Hike Mean for Construction in California? Probably Not Much.

by Wendel, Rosen, Black & Dean LLP
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This past week, backed by a small army of construction apprentice program students in green hard hats, Governor Jerry Brown signed legislation which will increase California’s minimum wage from its current $8 to $9 per hour beginning July 1, 2014 and from $9 to $10 per hour beginning January 1, 2016, making California’s minimum wage the highest in the nation.

But despite the impressive backdrop of smiling, uniformed construction workers representing California’s future labor force, what will California’s minimum wage increase mean for construction in California?

Probably not much.

According to the U.S. Bureau of Labor Statistics’ most recent survey taken in May 2012, California employed 85,000 construction laborers who earned an annual mean wage of $42,790 per year at an hourly mean wage of $20.57 per hour, second behind only New York whose 49,790 construction laborers earned an annual mean wage of $49,350 per year at an hourly mean wage of $23.73 per hour.

Now, we’re talking about “mean” not “average” wages, so half of the construction laborers in California earn more than $20.57 per hour while half earn less.  Yet, even for those earning less than the mean, they would have to take a pay cut of more than $10 per hour to get to the new minimum wage of $10 per hour, which doesn’t take effect until more than two years from now in 2016, and that will be compared to hourly wages nearly four years earlier in 2012!

So, other than the lowest paid construction workers, the new minimum wage increase will likely benefit few construction workers in California.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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