Bill to hike minimum wage to $10.25 by 1919 headed to Senate floor

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Interfaith Workers Rally to Raise the Minimum Wage
uusc4all via Foter.com / CC BY-NC-ND

A  proposal to increase the state’s minimum wage is headed to the Senate floor.

Senate Bill 39   increases  Delaware’s minimum wage from $8.25 to  $10.25 per hour by 1919  a figure similar to the one proposed by the Obama administration for a national minimum wage.

An amendment to the bill would go a step further.

According to the amendment, the minimum wage would increase by 50 cents a year beginning in 2016 and ending in 2019, and adds additional provisions increasing the minimum wage by $1.20 a year beginning in 2020 and ending in 2023.

Removed was a cost of living adjustment that in the current economy would bring only small gains in the base wage . However, some economists are predicting a higher rate of inflation at some point that would drive up the COLA formula.

“This is something that is needed to give a hand up to the people at the foundation of our economy,” said Sen. Robert Marshall, the bill’s sponsor. “There are two great truths about this – no one will get rich from it and it’s money that will go right back into the economy helping people meet their day-to-day living expenses.”

The proposal faces strong opposition from the business community, including the Delaware Restaurant Association. Similar arguments were issued earlier when the state base wage was raised from $7.75 an hour.

Opponents argue that recent increases in the minimum wage in Seattle and other cities have led to declines in employment.

Other arguments that were raised against the Delaware bill include:

– Fewer jobs  in the state and greater mechanization. That would hurt businesses that need manual labor in order to survive.
–  Other states in our region with lower minimum wages will benefit by getting Delaware manufacturing jobs.
– New businesses and startups will not be thrilled with locating their business in Delaware when they have friendlier lower cost environments in other states
– Current businesses in the state that rely heavily on lower wage labor may go out of business or at least downscale on labor and benefits.
– There will much less training and hiring of younger employees like college and high school students for first jobs.
–  A higher minimum wage will push the entire bracket of wages upward.

Backers of a higher minimum wage claim evidence points in the other direction.  The U.S. Department of Labor has published a release on what it terms as  “myths” surrounding the higher minimum wage.

Seattle celebrity  restaurateur Tom Douglass, who grew up in Delaware, responded to the $15 an hour by dropping tips and  adding a 20 percent service charge. Douglass said employees deserve higher pay, although he acknowledged he might have to restructure operations or not open as many restaurants.

Members of the Senate Labor Committee spent about two hours hearing testimony from business groups, business owners and people working for the minimum wage.

“There was powerful testimony on both sides of the issue,” said Marshall, D-Wilmington West. “We heard from a lot of folks who are struggling to get by but we also heard a lot of doom and gloom scenarios laid out. However, the history of this issue shows improving the lives of minimum wage workers has never caused the state’s economy to collapse.”

Marshall said he plans to bring the measure to the Senate Tuesday so senators can act on it ahead of the annual break to let the Joint Finance Committee review Markell’s budget proposal.

“I expect a spirited debate, but I’m confident that Delaware’s minimum wage workers will prevail,” he said. “I want to get this approved in the Senate so the House can act on it when we come back in March.”

The measure faces an uncertain fate, especially with many  worried that  the legislation would send the wrong  message to companies thinking about adding jobs in the state.

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