Higher Minimum Wage for Government Contractors Could Cost Jobs in SA
President Obama's executive order hiking the minimum wage for federal contract workers to $10.10 an hour is causing concern for the city's Military Affairs office, 1200 WOAI news reports.
Contractors are used for a variety of jobs on military bases across the city. Contractors generally perform construction and maintenance, do landscaping work, work in food service, and perform certain clerical tasks.
Brig. Gen. Robert Murdock (USAF, Ret), who heads the city's Office of Military Affairs, says this decision comes at a time when military budgets are being cut, and funding for the sorts of work that military contractors do is being cut a lot. He says the extra costs of the higher minimum wage will have to be passed along, which will put the bases in a tough spot.
"They would not be able to afford to have that contractors support, at least not at the same level," Murdock said.
"That contractor is going to pass on that increases costs to the installation, which is not going to be able to pay that amount, or would have to reduce the service."
The President has the authority to raise the minimum wage for government contractors. Congressional action is needed for a general increase in the minimum wage, as the President wants.
But Murdock says, rather that giving the lowest paid workers more spending power, the decision may result in less work being done by contractors, which means less work for their employees.
"It would be pound foolish to increase the overall wage and then because of that have people lose their jobs because the military can no longer afford that service," he said.