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Friday, April 16, 2021

Will minimum wage hike to $15 help banish poverty or destroy business?

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A bill to raise minimum wage drew strong reaction during a Senate hearing Wednesday. Photo by Karolina Grabowska

 

It was a tale of two minimum wage hikes Wednesday during a hearing on a bill that would raise Delaware’s to $15 an hour by 2025.

Those in favor of the bill said raising it from $9.25 an hour would raise tens of thousands of Delawareans out of poverty, including a large number of women and minorities; help businesses thrive because higher wages means less turnover; and prevent workers from taking jobs in nearby states where minimum already is above Delaware’s.

Those opposed to the bill say it is coming at a bad time, especially for small businesses suffering huge revenue losses during the COVID-19; will mean many entry-level jobs disappear as employers will seek more experienced workers; workers will be pushed out of federal aid programs but not able to support those things on their new pay; and businesses will automate rather than hire people.

Suggestions to improve the bill include creating a committee to examine studies and evidence on both sides; delaying consideration of the bill for at least a year; keeping the state training wage; and carving out a break for struggling businesses, restaurants and those who hire seasonal workers.

The remarkably civil meeting ended without the committee taking a formal vote in public, but the bill tracker was amended online about two hours later to say it was reported out of committee with three yes votes and one on the merits. It had been on the on the agenda of the full Senate session before the committee hearing began.

 

If Senate Bill 15 moves to the Senate, it is expected to pass with no trouble because Democrats have a supermajority in the Senate, and all 14 Senate Democrats are in favor of it.

That means the bill can be passed with a 2/3 majority without any Republican support. It would then go to the House.

Bill sponsor Sen. Jack Walsh, D-Stanton, started the meeting by saying that minimum wage was instituted in 1938 to help lift America out of the Great Depression.

“And that’s the premise behind Senate Bill 15, which is intended to lift Delawareans out of poverty as we emerge out of this pandemic,” said Walsh, who is an electrician. While grocery clerks and those working in long-term care facilities have been hailed as heroes during the last year, he said, many kept working because they couldn’t afford to take a day off.

“Every time we debate the wage, like we did two years ago … we hear from business interests who claim the sky is falling,” he said. That’s not true, he said. Historical evidence shows the unemployment rate falls or remains flat, the labor rate increases or remains flat and Delaware’s gross domestic product grows or remains flat.

Walsh said he wasn’t deaf to the concerns of the business community, which is why the first increase to $10.50 an hour takes place in January, with additional rises until Jan. 1, 2025 when it tops out.

 

“The bill should not be a question of pro business or anti business. It’s just a simple question of whether you believe in lifting people out of poverty or not,” Walsh said.

He said it’s not true that most minimum wage earners are teenagers working part-time. He said 63% are older than 25; 60% are women with many single mothers; and 51% are people of color. In Delaware, he said, 40% of low wage earners are of color, including nearly half of all Hispanic workers.

Committee member Sen. Colin Bonini, R-Dover South, said the bill will do the exact opposite of what Walsh wants it to. It will mean fewer opportunities for workers because businesses won’t hire them back and will send a message to corporations that they shouldn’t come to Delaware.

“I will tell you that Delaware’s economic story is not a great one,” Bonini said. “If you look at who is recovering from this in these recent large recessions we’ve had over the last couple of decades, you will see the Delaware is one of the worst. There are some measurements that have Delaware as the worst economy.”

He urged Walsh to push it off until the economy recovers.

Sen. Bryant Richardson, R-Seaford, suggested the state set up a committee to examine evidence from both sides before considering it.

So many people wanted to comment on the bill that organizations were given two minutes and individuals one. About halfway through, Walsh cut that to one minute per speaker, with many dropping out of the queue as people pounded the same points.

Those commenting fell strongly into one category or the other. Here’s a sample of what they said.

 

For

  • Alissa Barron Menza, vice president of Businesses for a Fair Minimum Wage, said raising minimum wage makes good business sense because it sets a wage floor, and also because employees spend their money in the community.
  • Margot Dorfman, CEO of the U.S. Women’s Chamber of Commerce in Washington, D.C., said raising minimum wage isn’t a fight between business and workers but good for both. She also said the typical low wage worker is an adult woman who is a waitress at Applebee’s, cashier at Walmart or health aide working with older people.
  • Courtney Sunborn, owner of Ecolistic Cleaning in Lewes, said she pays $14.50 an hour, which helps her keep good employees. Raising minimum wage will help other businesses do that, too.
  • David Cooper of the Economic Policy Institute in Washington, D.C., said there is not a single county in America where $15 an hour will enable the worker to pay for basic necessities. Raising Delaware’s minimum wage would lift pay for 122,000 workers in Delaware, or roughly 27% of the workforce, he said.
  • Yannett LaThrop of the National Employment Law Project in New York, said that if the bill becomes law, Delaware would be one of nine states in the process of raising minimum wage and that it would provide a modest but meaningful boost to the economy.
  • Larry Tarabicos, a New Castle County lawyer, said no employee working fulltime should make less than $30,000 a year, but suggested that legislature might want to carve out exemptions for restaurants, businesses that hire seasonal workers and small businesses that are not profitable.
  • Linda Barnett of the Delaware League of Women Voters said studies show a worker needs to earn $21.97 to pay basic bills and raising minimum wage to $15 is a start toward giving them self-sufficiency.
  • Andrea Brown-Clark of the Metropolitan Wilmington Urban League said that the bill would help minority women, who were predominantly the bread winners in their family, and that the state had a “moral right” to invest in human capital and raise minimum wage.
  • Daisy Cruz of SIEU 32BJ, which represents 800 building services workers such as cleaners, janitors and security, said raising the minimum wage was long overdue and that “does not mean luxury; it means to strive forward on a path towards earning a family sustaining income.”
  • Caroline Petrak of the Ability Network of Delaware, which works with healthcare workers supporting patients with disabilities, said a raise has long been needed for the mostly female workforce that has high turnover. She said the state paid $9.62 in its contracts for those workers, and it should be raised.
  • Fleur McKindle of the Delaware NAACP branch said pay is “intricately linked to the economic injustices that continue to plague our society. The inability for everyone regardless of race or sex to earn a fair livable wage has been a long standing civil rights issue. Because of systemic sexism and racism, people of color and women have historically been locked out of the American dream. “

 

Against

  • Tyler Micik of the Delaware State Chamber of Commerce argued that 40% of Delaware’s unemployed have been unemployed for 7.5 months or longer and raising minimum wage could lengthen that. The minimum wage bill is one of several proposed changes that will hit business owners in the wallet, making it harder for them to hire people back. “I would kindly request you to ask yourself — is now really the best time for an increase in minimum wage or could this be the final straw that breaks small business owners backs?” He said the state should wait and see what happens after the CARES Act money goes away.
  • Mike O’Halloran of NFIB Delaware, which reps small, independent businesses, said it will take many years to recover, some will fail and raising minimum wage will not help.
  • Julie Wenger with the Delaware Food Industry Council, said the grocery industry provides 15,000 jobs, many of them entry-level jobs. If minimum wage is raised, the industry will invest in more automated equipment and offer fewer shifts, she said.
  • Sherm Porter, who owns Sherm’s Catering, said raising minimum wage would mean he has to raise pay for all his workers. They earn from $12 an hour to $23. If he raises the $12 an hour person to $15, he will have to raise everybody’s salary by $3 to be fair. And that will be expensive.
  • Patrick Keefe, owner of Frog Hollow Golf Course and Restaurant, said his business is struggling and he’d appreciate the bill being set aside for a year.
  • Scott Kidner of the Central Delaware Chamber of Commerce pointed out Delaware is still under a state of emergency order and businesses also face costs from youth and training wages being removed, tip wages being raised and more. He said the state should wait until the state of emergency is lifted before trying to raise minimum wage.
  • Frank Horton, owner of Back Creek Golf Course and restaurant, said 70 percent of his workers were first time, unskilled workers. Raising minimum wage would force him to cut the vast majority, he said.
  • Robert Overmiller said he was among the 65% of Delawareans who are retired and living on a fixed income. If minimum wage is raised, he said, the cost of living of older people could be raised to the point that they have to choose between food or medicine.
  • Sherry Long with Restore Delaware said the state needed to follow the lead of Sens. Chris Coons and Tom Carper and not raise the minimum wage.
  • Maria Fraser, who owns Cafe on 26 in Ocean View, said she believes in lifting people out of poverty but opposed SB15. Recovery is going to be stressful and restaurants already have raised their prices because of higher food costs, insurance, utilities and rent.  Raising minimum wage will drive them out of business. she said.
  • Alexander Kotanides, who owns Pats Pizza in Lewes, said federal rule say anyone earning over $22,000 will lose food, housing and other benefits. He questioned whether raising minimum wage to $15 would actually hurt workers.
  • Carrie Leishman, CEO of the Delaware Restaurant Association pointed out that people’s opinions seemed to matter very little since the bill was already on the agenda for the Senate session Thursday.

 

 

 

 

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Delaware passes 100,000 COVID-19 cases

The number of variant cases continue to rise, but the state only tested 92 samples last week.

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Christian Colmery pitched 5 innings of shutout ball

Help biodiversity by picking up native plant each time you go to nursery

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