$15 minimum wage? Delaware bill to raise wage from $9.25 by 2025 filed

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DOVER — Delaware legislators on Tuesday introduced a bill to raise the state’s minimum wage from $9.25 to $15 by 2025.

Last raised in 2019, Delaware’s minimum wage currently sits $2 above the federal mark.

“It boils down to one core principle: Someone who puts in a hard day’s work deserves to earn enough to keep a roof over their head and food on the table. Frankly, they deserve what previous generations of low-wage earners have had — a living wage,” said main sponsor Sen. Jack Walsh, D-Stanton, during a virtual news conference Monday in support of the effort.

The bill would raise the wage to $10.50 per hour in 2022, followed by $11.75 in 2023, $13.25 in 2024 and $15 in 2025.

Twenty-three states currently have a minimum wage higher than $9.25, including seven that are in the process of raising it to $15. Maryland and New Jersey are among those phasing in a $15 wage, while Washington D.C. already has.

The measure has support from all 14 Senate Democrats, with 18 of the 26 House Democrats listed as cosponsors. It needs 11 votes in the Senate and 21 in the House. Gov. John Carney is in favor of it.

Supporters firmly believe a higher minimum wage will lift many people out of poverty, with Sen. Walsh describing it as a moral imperative.

“Minimum wage increases will actually aid Delaware’s economy by helping to build a widely shared recovery,” Rep. Gerald Brady, D-Wilmington, said in a statement. “Raising the minimum wage will boost the consumer spending that local businesses rely on.

“It will reduce the strain on the safety net caused by wages that people can’t live on and help level the playing field for businesses. Additionally, the increases will encourage the kind of fair pay, lower turnover, better customer service business model that will help small businesses survive and thrive.”

A push to raise the wage to $15 in the prior General Assembly found little success, although the 2020 session was derailed by COVID-19.

Gov. Carney’s January budget proposal included funding to raise salaries for about 630 executive branch employees (4-5% of all state workers) to $15 an hour.

Business concerns

Despite the confidence supporters have the measure will benefit the state, businesses are deeply concerned about the prospect of increased labor costs.

Michael Quaranta, president of the Delaware State Chamber of Commerce, previously predicted an increase in the minimum wage could backfire, with layoffs and higher prices.

House Minority Leader Danny Short, a Seaford Republican, is among those who see a $15 wage as untenable. Employers will be forced to let people go, he said, and those entities are the lucky ones: The unlucky ones will close their doors entirely.

A higher minimum wage, Rep. Short noted, also affects people who may be earning more than that, as a person making $16 an hour, for instance, would probably want their pay to grow if the floor jumps to $15.

On top of that, Republicans and business advocates believe it’s not fair to burden businesses right now, with profits down over the past year because of the pandemic.

“Adding costs to businesses will cripple them,” Judy Diogo, president and CEO of the Central Delaware Chamber of Commerce, said in December.

One of the key points of contention is who exactly is making minimum wage: Is it mostly teenagers getting their first on-the-job experience and retirees looking to make a little more money, or is it adults, many of them single parents, struggling to pay the bills?

According to the U.S. Bureau of Labor Statistics, 82.3 million Americans 16 and older were paid by the hour in 2019. Of those, 1.6 million made the federal minimum wage (or less). Forty-three percent of minimum wage earners were no older than 24, and 55% worked fewer than 35 hours per week. They were also more likely to be female and not to have a degree from a four-year college.

The Congressional Budget Office released a report last month concluding a $15 federal minimum wage would result in 1.4 million people losing their jobs (a .9% increase in unemployment) but would also lift 900,000 people out of poverty. At least 17 million individuals across the country would see higher pay.

Coincidentally, a vote to include a $15 minimum wage in a COVID relief package failed in the U.S. Senate on Friday. Both of Delaware’s senators voted no, although the two say they still support bumping the wage floor to $15.

Locally, the push appears to have substantial momentum right now. Several Democrats who unseated incumbents last year ran in part on a living wage, and unions and other pro-worker groups are mobilizing to support it.

“A thriving middle class is the key to economic prosperity, but even the most basic financial stability is an impossibility for thousands of Delaware workers simply because the pay floor we have set is not keeping up with the cost of living,” said Gabe Morgan, vice president of the Service Employees International Union 32BJ, in a statement. “Make no mistake: all Delawareans are paying the cost of that short-sightedness through assistance programs that are increasingly subsidizing businesses that don’t pay their workers a living wage.”

The bill is expected to be heard in the Senate Labor Committee March 17.