No Exceptions: Why Every Worker on Harris County Contracts Should Earn a Fair Wage Report

By Economy for Working Houston June 2025

Summary

Under Harris County’s newly adopted minimum wage policy, all Harris County employees will earn at least $20 per hour, effective May 3, 2025, and contracted workers on county projects solicited after July 1, 2025, will be paid at least $21.65 per hour. This policy is crucial to attracting and retaining a skilled workforce and ensuring that public dollars support fair wages for all workers contributing to the County’s infrastructure and public services.

The Houston Contractors Association (HCA) has requested to exempt civil construction projects, as well as the projects overseen by the Harris County Toll Road Authority (HCTRA) and the Harris County Flood Control District (HCFCD) from this policy. Exempting these sectors would undermine the policy’s intent and leave thousands of working families behind, especially those doing some of the most essential, high-risk, and physically demanding work in our communities.

Cost of Living Crisis

The cost of living in our region has risen sharply over the past 5 years. According to a 2024 Pew Research Center analysis, consumer prices in the Houston - The Woodlands Sugar Land metro area have increased by 19.8% since the beginning of the COVID-19 pandemic. One of the steepest increases has been in food prices - fruits and vegetables alone are up 29.1%.3 For working families, that means higher grocery bills, tighter budgets, and harder everyday choices.  It is more important than ever to ensure that all workers, no matter their sector, earn a living wage that keeps up with the cost of living. 

Harris County’s minimum wage policy is a critical step toward ensuring that working people across the County can afford to live with dignity and financial stability. Beyond meeting workers’ basic needs, a higher wage benefits the local economy and employers. Harris County, one of the region’s largest employers with over 20,000 workers, is setting an important standard.

Impacts on Workers

The civil construction workers in Harris County perform essential, physically demanding, and often hazardous work. In addition to physical risks, civil construction workers face serious psychological hazards such as stress, low morale, mental health strain caused by low wages, job insecurity and poor working conditions. According to the National Institute for Occupational Safety and Health (NIOSH), these psychological factors, though less visible, significantly impact workers’ health and safety. By ensuring a $21.65 minimum wage, Harris County will help reduce these psychological stressors of civil construction workers, reduce risks to workers, employers, and Harris County, and support the physical and mental well-being of these essential construction workers.

The HCA has stated that applying the $21.65 wage creates “inequities” among workers employed by general contractors and subcontractors working on Harris County contracts versus private sector and non-Harris County government contracts. This minimum wage implementation is not the cause of these “inequities”; instead, it is progress. The County has a responsibility to ensure that its public dollars do not subsidize poverty wages and the MIT Living Wage is designed to prevent just that. Valid inequalities lie in the existing wage disparities within the same workforce, but Harris county should not harmonize wages downward and exempt some workers from the dignity of a living wage. The solution is for contractors to raise wages for all employees in the same job classification to a livable wage whether or not they are working on Harris County jobs. The county should not empower contractors to do less, but rather lead by example.

Further, HCA’s claim that overtime compensation already brings wages above a living wage is misleading. A sustainable wage should not depend on having to work excessive or extended hours. A comprehensive meta-analysis of 243 studies found that long working hours are significantly associated with increased risk of sleep disorders, fatigue, injuries, cardiovascular disease, and poor mental health. Workers should not face pressure to work overtime or over the weekends to make ends meet. The solution is for contractors to hire at staffing levels that allow them to meet their contractual obligations without requiring excessive overtime, create more job opportunities for Harris County residents, and pay a living wage that does not require overtime to meet that standard.

Economic Viability and Benefits of Increased Wages

The impact of cost of living increases and stagnant wages on our local economy is tangible and being felt by businesses in our community. However, contractors bidding on projects with Harris County are in a unique position - they are able to factor in the minimum wage threshold in their bid applications, and the County’s policy effectively prevents low-road contractors from undercutting that wage threshold. The price of higher minimum wages is accounted for in the County’s request for proposals; contractors are able to incorporate these standards into viable business proposals to the County. Additionally, an Economic Policy Institute article notes that labor costs, including benefits and payroll taxes, are roughly one-quarter of construction costs and that a wage increase of 10% would impact contract costs by less than 2.5%. They add, “Thus, even if there is an increase in contract costs it is likely to be small—to the point of being undetectable.” 

Increased wages help to bolster the local economy by resulting in increased consumer spending. When workers earn more, they gain more consumption power and spend more money in their local economies on both small purchases like restaurant dining and are empowered to make bigger purchases like a family car. These increases in consumer spending, in turn, spur additional job growth, resulting in exponential benefits for local economies. 

Employer Benefits of a Living Wage

Studies have found that 93% of companies paying a living wage reported experiencing benefits to their businesses. Many of these benefits can offset the increased costs of employee wages. 

Cost savings are found via significant reductions in turnover, resulting in reduced recruitment and training costs. It is estimated that replacing a low hourly wage worker costs 16% of their annual base pay. This savings is likely compounded by the “Cost of Job Loss” Effect, where workers put in a greater effort on the job in order to prevent the risk of job loss now that the role is more desirable.

A 2017 academic research study noted that over half of businesses paying a living wage noted both recruitment and retention were improved while 45% also noted applicants for openings were also higher quality. They also found that more than half experienced improved relations between employees and managers.

Cost savings can also be found as a result of increased productivity. The Peterson Institute for International Economics notes that higher wages motivate employees to work harder. In addition to the increased output as a result of the “Cost of Job Loss” noted before, Reductions in turnover results in a more experienced, higher skilled workforce. The increase in pay improves morale and commitment to the job, resulting in reduced absenteeism. Reductions in turnover results in a more experienced, higher skilled workforce.14  

Conclusion

Harris County should not rollback or exempt any industries from the commitment made though the minimum wage policy adopted on March 27, 2025. Harris County employers, workers, and our overall economy benefits from this policy. Harris County should uphold the minimum wage policy without exemptions for civil construction workers, HCTRA, and HCFCD contracts. Harris County should continue leading the region in setting standards for prioritizing fair compensation for all workers.