Washington, D.C. — A new analysis from the Center for American Progress finds that sectoral pay standards can raise wages, improve affordability, and strengthen workforce stability across key sectors. By standardizing compensation, these policies help workers earn decent market-based wages and benefits while ensuring employers compete on quality and productivity, rather than cutting pay.
The report highlights recent action in New York City and Baltimore, where new standards for private security guards will raise pay to roughly $18 per hour plus benefits and improve conditions for tens of thousands of workers, with implementation of both laws starting in 2027. These policies reflect a growing trend of extending prevailing wage-style protections across entire industries.
“Sectoral pay standards are a proven way to raise wages and make work pay,” said Karla Walter, senior fellow at the Center for American Progress and author of the analysis. “By embracing these policies, state and local policymakers have a clear opportunity to tackle the affordability crisis and strengthen key industries at the same time.”
The report finds that sectoral pay standards deliver wide-ranging benefits, including:
- Higher wages and greater economic security. Workers in sectors with pay standards earn more, are more likely to receive health coverage, and are better able to afford housing and retirement.
- Lower health care and household costs. Employer benefit requirements increase access to insurance and reduce financial strain on families facing rising health care expenses.
- Reduced turnover and stronger workforces. After San Francisco adopted an airport worker pay standard, turnover fell from nearly 95 percent to 19 percent, saving employers thousands per worker.
- Improved public safety and service delivery. Better pay helps retain experienced workers in high-stakes roles, such as security, where training and stability are critical.
- Lower taxpayer costs. Higher wages reduce workers’ reliance on public assistance programs and increase local tax revenues.
- A level playing field for businesses and workers. Industry-wide standards prevent low-road firms from undercutting wages, ensuring employers compete on quality while extending market-based pay and benefits across the sector.
As affordability pressures persist, state and local policymakers should adopt sectoral pay standards as part of a broader strategy to boost wages and lower costs for working families.
Read the analysis: “How Market-Based Sectoral Pay Standards Raise Wages and Improve Affordability” by Karla Walter
For more information or to speak with an expert, please contact Christian Unkenholz at [email protected].