The federal minimum wage has been $7.25 since 2009. Is it time for an increase? If so, what is an appropriate level? Should it be a living wage or something more modest?
Those questions plague policymakers, business owners, employees and others in the nation’s capital and around the country.
As congressional Democrats and the White House push a COVID relief package, it remains to be seen whether it will contain a provision that would more than double the wage floor over several years. According to the website Politico, the Senate parliamentarian could rule today whether a wage hike can be included in the COVID relief legislation, although the site reported President Joe Biden has backed off raising the wage through that process.
Democrats have no margin for error in the Senate, and given several of their members have already expressed grave concerns about a $15 minimum wage, the hurdles seem quite large.
Delaware’s minimum wage has been $9.25 since 2019, although Sen. Jack Walsh, a Stanton Democrat, is planning a bill that would raise it to $15. The measure, which has the support of unions and grass-roots organizations, is fiercely opposed by businesses and Republicans.
Although the General Assembly is currently on break, it will return March 9. Attempts to reach Sen. Walsh for comment were unsuccessful.
A push to raise the wage to $15 in the prior General Assembly found little success, although the 2020 session was derailed by COVID.
Michael Quaranta, president of the Delaware State Chamber of Commerce, believes that while well-intentioned, a minimum wage increase would backfire.
“Sadly, the very people policymakers intend to help will be the ones left behind,” he said.
Many fear a higher minimum wage will lead to layoffs and reductions in hours for some, while prices would rise. Business advocates say they especially cannot afford higher labor costs right now with the pandemic still raging.
“Adding costs to businesses will cripple them,” said Judy Diogo, president and CEO of the Central Delaware Chamber of Commerce, in December.
The Congressional Budget Office released a report earlier this month concluding a $15 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.
Someone making $7.25 an hour and working 40 hours per week earns just over $15,000 in a year. While that’s above the federal poverty line of $12,760 for a single individual, it’s certainly difficult to live on that sum even in a one-person household.
To American Federation of State, County & Municipal Employees Council 81 Executive Director Mike Begatto, a $15 minimum wage would go a long way toward giving people peace of mind.
“We agree with what Biden says. No one should work a full-time job and make less than a living wage,” Mr. Begatto said.
While admitting an increase would have to be done in stages to avoid harming the economy, Mr. Begatto firmly believes workers deserve higher pay. The country could save money on the back end because fewer people would need assistance like Medicaid or food stamps, he noted.
Gov. John Carney’s budget recommendations unveiled in January include funding to raise salaries for about 630 executive branch employees (4-5% of all state workers) to $15 an hour.
House Minority Leader Danny Short, a Seaford Republican, is among those who see that 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.
“There’s going to be a ripple effect,” he said.
Mr. Quaranta would like to see state officials focus on job training programs like Forward Delaware, which can set people up for careers in fields like health care, IT, construction and hospitality. The trades pay well and have a shortage of skilled employees, in part because of the overemphasis on higher education, he said.
One of the key points of contention is who exactly is making minimum wage now: 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?
“It really is all over the map, and I really think it crosses genders and every socioeconomic demographic you could imagine,” Mr. Quaranta said.
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 three members of Delaware’s congressional delegation, all Democrats, back a higher minimum wage.
“I have supported raising the minimum wage to $15 for years because it’s obvious that we need to do more to support hard-working Americans,” Sen. Tom Carper said in a statement. “In this moment, we also want to be mindful, though, of the small businesses across our country that have been hit particularly hard this past year during an unprecedented pandemic.”
Sen. Chris Coons also is in favor of increasing the wage, although he has concerns about the side effects.
“We have to raise the federal minimum wage, but we have to raise it in a way that recognizes that some of our economic sectors, restaurants and hotels, in particular, have been hit particularly hard. I’m looking at a proposal that would gradually increase the minimum wage over a number of years after this pandemic so that businesses can plan for it, families can plan for it and we get to the point over a couple of years, where folks who are adults who are working full time are not in poverty,” he said in a statement.
“I think a basic principle is that any adult who’s working full time at a minimum-wage job ought to be able to afford the basics of life. And $7.25 is the federal minimum, which hasn’t been raised in many years, is just far too low. And I think we’re ultimately going to come together around a proposal that gradually increases the federal minimum wage over a number of years.”
He told CNN Monday the coronavirus relief package should not be stalled because of a “minor policy disagreement in the context of this much larger bill.”
For Rep. Lisa Blunt Rochester, a $15 minimum wage phased in gradually “represents a necessary and long-overdue investment in the American people.”
If the Senate parliamentarian rules against the wage increase as expected, the issue will be considered separately from COVID relief. Expect advocates to keep up the fight for $15, just as businesses will continue to push back. Even if the federal government shoots down a wage hike, it could still happen in Delaware, of course.