DOVER — After one of the most impactful votes the General Assembly has taken in years, legislation to raise the state’s minimum wage to $15 is now before Gov. John Carney.
In a 26-15 party-line vote, the House of Representatives approved a bill to increase the wage floor from $9.25 in a series of steps Thursday. The bill passed the Senate with solely Democratic support in March.
Per his office, Gov. Carney backs a $15 minimum wage.
Senate Bill 15 would start by increasing the wage to $10.50 in 2022, followed by $11.75 in 2023 and $13.25 in 2024 before hitting $15 in 2025.
Last altered in 2019, Delaware’s minimum wage is currently $2 more than the federal mark. Twenty-two states have a minimum wage higher than $9.25, including nine 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., has already done so.
According to the Delaware Department of Labor, close to 150,000 residents would be impacted by Senate Bill 15, including 35,000 currently earning the state minimum wage. The Congressional Budget Office released a report earlier this year concluding a $15 federal minimum wage would result in 1.4 million people losing their jobs (a 0.9% increase in unemployment) but would also lift 900,000 people out of poverty.
Legislators debated the bill for an hour Thursday, with the House defeating seven amendments, including one from a Democrat, to delay implementation, cut the increase or study the impacts of a higher minimum wage. Republicans did most of the talking, though they failed to sway anyone on the other side.
Arguing the bill will help lift people out of poverty and put more money in the economy, supporters dismissed concerns the measure will have unintended consequences.
“If there are a thousand businesses that will lose some money, there are tens of thousands of workers who will enjoy a fairer wage for their work,” Rep. John Kowalko, D-Newark, said.
But to opponents, the outcome is clear: While some people will indeed earn more money, the bill will also result in layoffs, higher prices, business closures, greater automation and fewer employees being hired.
“Yeah, we’re going to help some folks, but in the end ... it’s going to be a detriment on a larger group of folks than it’s going to help,” said Rep. Shannon Morris, R-Camden-Wyoming, noting businesses have suffered greatly over the past 15 months due to the pandemic.
Rep. Ruth Briggs King, R-Georgetown, warned the measure could have disastrous consequences for nonprofits, which often cannot raise their prices, while Rep. Lyndon Yearick, R-Magnolia, questioned if the increases could force people over the qualifying threshold for important government benefits and thus result in a net negative for them.
Several legislators urged Democrats to let the market work, noting many businesses are currently offering $15 an hour or similar amounts due to demand for employees.
Rep. Mike Smith, R-Pike Creek, disputed the official fiscal estimate attached to the bill, which totals $2.9 million over the next three years. Myriad indirect costs are not considered there, he said, such the increased funding the state will have to allocate to nonprofits in the annual grant-in-aid bill.
“You just shot down all the amendments that help us get to the practical so that we know how to absorb it for the state ... that was political, that was not a policy,” he said.
Mike O’Halloran, director of the Delaware chapter of the National Federation of Independent Business, in a statement afterward criticized the vote as adding “insult to injury after small business owners, who have already been devastated by the COVID-19 pandemic, are finally starting to see the light at the end of the tunnel.”
But progressives and labor movements remain confident the vote will benefit Delaware as a whole.
“Raising Delaware’s minimum wage will boost the economy and help businesses and communities thrive,” Alissa Barron-Menza, vice president of Business for a Fair Minimum Wage, said in a statement. “Minimum wage increases go right back into the economy as workers can afford to buy more at local businesses. And businesses raising wages will benefit from lower employee turnover and increased productivity and customer satisfaction.”
Several Democratic lawmakers trumpeted the results on Twitter Thursday night, as did the state Democratic Party and Rep. Lisa Blunt Rochester, Delaware’s lone member of the U.S. House of Representatives.
“While the minimum wage based on inflation should be much higher, this is a much-needed first step in helping working families in the First State earn livable wages,” Karl Stomberg, Delaware Working Families Party organizer, said in a statement. “As President Biden campaigns for his infrastructure and jobs package, we decided the time was now when it came to local action on this crucial issue. Now, thanks to more progressives in seats of power, local organizing, and campaigning, Delawareans will finally be getting the raise that working families need.”