Delaware Democrats are circulating a draft of a bill to raise the minimum wage to $15 an hour by 2026; which would amount to a 61.6% increase. Proponents of the bill are now hoping to add sponsors in the state House and Senate.
Many Republicans and business owners say that any raise in the minimum wage is going to be difficult for many businesses already struggling to cope with the effects of the COVID-19 pandemic and will result in lay-offs, fewer people being hired, and even some closures.
Democrats, though, have long been committed to raising the minimum wage, saying it needs to be more of a living wage. Many candidates this year included raising the minimum wage in their platforms, and President-elect Joe Biden has said he’s for it, but not given any details about how he plans to implement that.
A similar bill last year made it out of committee, but wasn’t discussed further because of the COVID-19 crisis, said Sen. Jack Walsh (D-Stanton), a sponsor of the bill. He plans to reintroduce the bill when the 151st General Assembly opens in January.
“A lot of people want it, not only statewide but nationwide right now,” Walsh said.
“We are not in favor of increasing minimum wage,” said Judy Diogo of Central Delaware Chamber of Commerce in Dover, “especially in light of what our business community has just been through. It’s going to take them a couple of years to recuperate from that. They are not going to get over that in a year. So we need to give them some time to get past that, but we also do not believe the state’s government should be mandating wages.”
Walsh, who for the last two years was chairman of the Delaware Senate’s Labor Committee, said he was sensitive to the impacts on businesses, particularly small family-owned businesses that employ a big part of Delaware’s workforce.
“It’s not something that’s going to happen without discussion,” he said. “There are a lot of different groups that will have weighed in on this.”
The bill would raise the minimum wage by $1.75 an hour in 2021, making it $11 an hour. Then, the minimum wage would rise at least $1 a year through 2026, when it could be not less than $15 an hour.
Beyond 2026, the draft bill said, the minimum wage would be raised by an increase in the consumer price index for all urban wage earners and clerical workers.
The bill also said that if a federal minimum wage is established that’s higher than Delaware’s, the state minimum wage will be raised to equal that.
The draft being circulated doesn’t yet include a line saying what the raise would cost the state. Walsh said he believed it would be similar to the last bill, which would have raised minimum wage to $15 by 2024. That bill’s financial note said it would cost the state of Delaware $30.9 million during that time because so many state employees don’t earn $15 an hour.
Already signed on as sponsors are Sen. Darius Brown (D-Wilmington), Sen. Nicole Poore (D-New Castle), Rep. Gerald Brady (D-Wilmington), Rep. Valerie Longhurst (D-Bear), Rep. Edward Osienski (D-Newark), and Rep. K. Williams (D-Newport).
Terri Sorantino of Liquid Alchemy Beverages in Wilmington said she is in favor of raising the minimum wage, although it’s coming at a bad time for businesses.
“I think people really need that to survive,” she said. “When you look at minimum wage now, it’s not a survivable wage. That said, we couldn’t sustain keeping the same number of people on staff that we do now.”
She may not have to lay anyone off, she said.
“But I certainly wouldn’t have as many people working at one time,” she said. “We would probably have a slimmer staff than we currently have.”
Sorantino has nine part-time workers, all of whom work at Liquid Alchemy as a second job. It’s not a typical work force, she said.
State Rep. Gerald Hocker, R-Ocean View, and minority leader in the House, was a lot more blunt.
“There’s an awful lot of small business owners down and out right now and just hanging on,” said Hocker, who owns a grocery store. “Whoever sponsored this bill just wants to put a lot of struggling businesses under.”
It’s a terrible time to introduce the bill for workers, too, he said.
“Your low-income people are really struggling and the minimum wage bill hurts them the worse because they could end up losing their jobs” when businesses can’t pay it, Hocker said.
If the minimum wage goes up, Hocker said, “I’ll put in more self check-out stands. We have four now. I’ll go to eight.”
That would eliminate about four jobs, he said. If necessary, he’ll put a kiosk in that would allow him to eliminate two other jobs.
“Businesses have to do everything they can to cut costs right now because they are struggling,” he said.
Bob Older, founder and head of the Delaware Small Business Chamber, said he’s hoping the bill will die in committee before it gets started.
“We can’t get hit with another thing,” he said.
He said his travel agency’s business is down 60 percent this year, but the state did not consider it a disproportionately affected business.
“So many companies are losing a lot of money,” he said. A lot of the grants and monies coming in are loans, not gifts, he said.
Raising the minimum wage, even over five years, “is going to hurt too many people,” he said.
He also believes that raising the minimum wage will force businesses to raise the costs of services and products, meaning that those who get paid more will end up spending that hike just to stay even. He also believes there could be layoffs.
“This is not how we save small businesses after this terrible nine months,” Older said.
“If they want to do this, fine,” Older said. “I understand there’s a need for a cost of living increase. Go to 50 cents an hour. Do something that’s more advantageous to small business people that isn’t going to create this chain reaction that’s going to destroy this business community.”
Walsh said he’s heard that argument whether the wage increase was 50 cents an hour or up to $15.
“Some people say it’s too fast and some people say it’s not fast enough,” Walsh said. “That will probably be another discussion.”
The bottom line for him, he said, is that he’s committed to providing workers with the dignity that comes from a hard’s day work.
“I feel no one should have a job and be sentenced to a life of poverty, and a lot of my colleagues feel that way,” Walsh said.
He believes a study that said a survivable household income in Delaware requires two workers who both make $22 an hour. Raising the minimum wage will help employees get closer to that.
Nobody wants to hand someone a life of luxury at $15 an hour, Walsh said.
“It simply means we’ll be giving our residents in our community a chance at a more survivable life,” he said.
Walsh believes the majority of workers on minimum wage are heads of households, single women and women of color, and says one in 5 children in Delaware live in poverty.
“It’s not enough,” he said. “We can do better and we must so that we can create a life out of poverty. That’s the gist of this bill … a livable wage, a somewhat livable wage.”
Diogo disagrees on many of those points. She believes raising the minimum wage will be particularly hurtful for the agriculture community.
“Most minimum wage jobs are starting jobs, and they do not merit being paid $11 an hour,” she said. “Minimum wage jobs are usually training jobs. That’s your first job.”
In addition, she said, raising the minimum wage will cause other worker pay to increase because businesses will have to compensate workers who have been on the job longer and worked to get to $15 an hour.
“We have to be cognizant of what happens when we start mandating wages,” Diogo said.