DOVER — On Jan. 1, minimum wage workers in Delaware will get a raise.
Part of a plan to increase the state’s minimum standard rate of pay to $15 per hour by 2025, Delaware’s rate will rise from $9.25 to $10.50 per hour.
The increase will continue with a hike to $11.75 in 2023, followed by $13.25 in 2024 before finishing at $15 in 2025.
The move to improve Delaware’s minimum wage began in July when Gov. John Carney signed Senate Bill 15 in to law.
“Delawareans who go to work full time shouldn’t be living in poverty,” said Gov. Carney at the bill’s signing ceremony in Wilmington this summer. “I am proud to sign Senate Bill 15 today, gradually increasing the minimum wage to $15.”
State Sen. Jack Walsh, D-Newport, and Rep. Gerald Brady, D-Wilmington, sponsored the bill.
“Thank you to Sen. Walsh and Rep. Brady for their leadership, other members of the General Assembly, union advocates, and everyone else striving to make Delaware the best place to live, work and raise a family,” Gov. Carney added in July.
Delaware joins California, Connecticut, Florida, Massachusetts, New Jersey, Illinois, Maryland and Rhode Island in the group of states that have already enacted an incremental hike to a $15 per hour minimum wage.
According to the Delaware Department of Labor there are 34,800 people in the First State that earn minimum wage and 53,000 people that earn $10 an hour or less.
Workers that receive tips of more than $30 a month will be exempt from the minimum wage change, according to Delaware code. Currently, those workers cannot be paid less than $2.23 per hour.
Rep. Kim Williams, D-Newport, introduced House Bill 94 in June to raise the minimum wage for workers that receive tips or gratuities. The proposed measure is currently assigned to the House Economic Development/Banking/Insurance & Commerce Committee and may be taken up in 2022.
Also exempt from the minimum wage increase are agricultural workers and those working in the seafood industry. Commission-based pay programs are also still allowed under the law.
“The labor movement has long advocated that working people share in the wealth we help create and our incomes should rise with increased productivity. Increasing the state minimum wage is a positive step in that direction that it benefits all Delawareans,” said James Maravelias, president of Delaware AFL-CIO.
Other wage changes
In 2019, the Delaware minimum wage increased twice, and a new tiered system was created.
On Jan. 1, 2019, the rate rose to $8.75 per hour then on Oct. 1 of the same year, it went to $9.25.
The legislation that made those increases also created a youth and training minimum wage rate set at $8.25 an hour.
The youth rate applied to workers ages 14 through 17 years old. The training rate applied to adult workers during their first 90 days on a new job.
The new tiered system didn’t last long. In September, Gov. Carney signed House Bill 88, sponsored by Rep. Williams and Sen. Walsh, which repealed the system.
That change will take effect on Dec. 29.
Critics of the minimum wage increase cite a concern for small businesses in the First State.
“I have spoken to some of our small business owners and what they have shared with me is that they are worried about all of it — the increase in minimum wage, the supply shortage and the labor shortage. They just don’t know how they can be expected to stay in business when they have so much stacked against them,” said Central Delaware Chamber of Commerce President Judy Diogo.
Since April 2020, 64 CDCC member businesses have closed their doors.
“That should be very alarming to all of us. We have to stop making it harder for our businesses to do business. As a state, we need to be supporting our businesses now more than ever and increasing their cost of doing business is the absolute worst thing we can do. We need to listen to them. We need to step back and really look at where they are and what they are trying to do. We need to hear them,” Ms. Diogo added.
The Delaware State Chamber of Commerce is also concerned.
“You are going to accelerate the demise of the very people you are setting out to help,” DSCC President Michael Quaranta said.
Though he acknowledges that Gov. Carney’s administration has made strides around workforce development, Mr. Quaranta said the state should do more in that arena rather than make changes to the minimum wage.
“The honest and better alternative is not to play with a minimum wage, rather it is to put our eyes on the 200,000 low-income people in this state and get them into work force training and development programs that meet the needs of employers,” he said.
Sen. Walsh disagrees that the wage change will hurt the economy.
“If you look at almost every instance that we’ve raised the minimum wage, you’ve seen the unemployment rate fall or remain flat. You see the labor force participation rate increase or remain flat and you see Delaware’s (Gross Domestic Product) grow or remain flat,” Sen. Walsh said.
Delaware’s GDP is the measure of the total of all value added to the economy.
From 2014 to 2019 Delaware’s economy grew in real terms by 5.34% at a compound annual growth rate of 1.05% per year. Real Delaware GDP, at $77.082 billion in 2019, is at the highest level recorded to date, according to the economic watchdog group the Department of Numbers.
Large businesses already pay more
Hobby Lobby Stores Inc., announced on Tuesday that it is raising its minimum full-time hourly wage to $18.50 effective Jan. 1.
In 2009, Hobby Lobby was one of the first retailers to establish a nationwide minimum hourly wage well above the federal minimum wage, and has since raised its minimum wage 12 times over the last 13 years. In 2014, Hobby Lobby raised its full-time minimum hourly wage to $15, well before it became a trend with other retailers.
“We have a long track record of taking care of our employees,” said Hobby Lobby founder and CEO, David Green. “In 1998, we made the decision to close our stores on Sundays, and at 8 p.m. the rest of the week, to provide employees time for rest, family, and worship. We’ve also worked hard over the years to provide the best pay and benefits in retail, which has allowed us to attract and retain an outstanding group of associates to serve our devoted customers.”
Delaware’s one Hobby Lobby store is in Dover.
Perdue Farms advertises its starting hourly wage for its production facilities at more than $14 per hour already.
Amazon and Walmart distribution centers in the First State also already meet or exceed the states minimum wage goals.