The Delaware State Senate last week passed a proposed increase in the Delaware minimum wage, mirroring an action taken last year.
It remains to be seen if the amended measure will meet as a similar proposal that died in the House last year. Some of the most controversial features were stripped out of the bill, including a cost of living formula.
Still, the timing for an increase in the minimum wage is not the best. Small businesses in Delaware are facing higher costs in a number of areas that include health insurance for full-time employees. The minimum wage also puts pressure to increase wages for all workers at some employers.
A struggling business suddenly has to pay more for a part-time workers will find itself with unhappy employees making more than the minimum wage who may not have seen a raise in years. Businesses have already faced grumbling from employees, thanks to the end of a Social Security tax break.
It is also no surprise, that the leading proponent of a minimum wage increase Sen. Robert Marshall is from New Castle County. Thanks, in part, to sprawl that makes a car a necessity, many employers in the county pay above the minimum wage.
Employers in Kent and Sussex counties face similar transportation challenges in finding workers. However, in the resort and retail-based economies in the two counties, a minimum wage job is an option for many workers seeking to make ends me.
An increase in the minimum wage would not be the economic disaster some have predicted.
However, it would make the outlook for teens or others seeking their first job more dismal. It would also worsen often lousy customer service at many big box stores, which would simply cut the number of part-time and in some cases full-time staff. But the situation is far more dire for a restaurant owner or retailer who may simply decide that the business simply can’t expand or even keep its doors open.
It is a good time for a conversation about ways to reduce the number of minimum wage jobs through training, education and smarter management. A couple of examples come from retailers Costco and Trader Joe’s. Both make money and pay a living wage.
It is worth noting that these retailers typically operate in larger metro areas. Retailers in smaller communities have less traffic and less room to raise wages. But simply imposing a higher wage in a sluggish economy is a bad idea. – Doug Rainey
Click here for story on retailers that pay higher wages.
