Earlier this year, the U.S. House of Representatives forwarded their plan to increase the federal minimum wage to $15 per hour by 2025 to the U.S. Senate. Originally introduced as the Raise the Wage Act of 2021, the minimum wage hike was expected to be part of the $1.9 trillion American Rescue Plan COVID-19 relief package moving through However, to the relief of many small business owners, the American Rescue Plan passed without the mandated minimum wage increase.
Under the Fair Labor Standards Act (FLSA), the current federal minimum wage is $7.25 per hour. However, this does not supersede state or local wage laws that are more favorable to employees.
Proponents of raising the minimum wage argue changes are needed so incomes keep pace with the increasing cost of living. In addition, many believe a higher minimum wage will lift millions out of poverty.
However, opponents of minimum wage increases propose that escalating wages will have several negative repercussions on not only the economy, but small businesses, as well. Some of those effects include inflation, making companies less competitive, and increased unemployment.
Within the snow and ice management community, opinions abound both for and against wage increases.
“In snow and ice, I pay employees skilled trade wages," says one Indiana snow contractor who participated in a recent wage survey. "I believe [a minimum wage increase] will affect the businesses we serve. I believe several will close and several will change scope."
"Cost of living continues to go up so people need to make more to survive and provide for their families," says a New Mexico contractor who does snow and ice management in the winter months. "This is a service industry, so for a residential or commercial entity to have that convenience they will need to budget for it. We, as an industry, need to make a commitment to each other to increase pricing unilaterally."
"If minimum wage is suddenly $15 per hour the guys making $20 or $25 per hour will now want $25 to $30 per hour. That is a direct result of the wage scale being compressed," says a Buffalo snow pro who adds he already pays his hourly employees more than the minimum wage.
Another snow professional believes the ripple effect of a wage increase could be devastating. "It would force [pay] raises to those who were [employed] for a couple of years and [already] making the $15 wage, and it would force us to scale down as well as pass a price hike on to customers, which in turn loses business. There are many other unforeseen issues here that doubling minimum wage causes. The intelligent people making these decisions should be ashamed to even consider such a drastic jump all at once.”
In March, Snow Magazine teamed with sister publication Lawn & Landscape to determine not only the impact a wage increase would have on green and snow industry business, but also to gauge the attitudes contractors have toward mandated salary hikes. Together, we compiled a brief survey via the online portal SurveyMonkey that addressed some topics in this complex issue. This survey was sent to the readers of both Snow Magazine and Lawn & Landscape and over a three-week period generated just over 650 responses.