Proposal to raise state minimum wage fuels fierce debate

22dns Minimum Wage Hearing 001 by .

Hope Bellamy of Wilmington speaks before a Senate committee asking for a $15/hr. minimum wage for Delaware. (Delaware State News/Dave Chambers )

DOVER — Many business owners are “frightened and scared” of potential increases to Delaware’s minimum wage over several years.

That’s according to Central Delaware Chamber of Commerce President Judy Diogo, who testified at Thursday’s public forum hosted by the Senate Labor and Industrial Relations Committee at Legislative Hall.

Sen. Robert Marshall, D-Wilmington West, is pushing to amend Senate Bill 39 and possibly increase the current $8.25 hourly pay rate incrementally over eight years, topping out at $15.05 effective June 1, 2023.

The bill cleared the Senate committee, with a proposed increase to $10.25 hourly by June 1, 2019, and amended to remove Cost of Living Adjustment increase after that in favor of pre-determined raises.

“This is something that is needed to give a hand up to the people at the foundation of our economy,” Sen. Marshall said.

“There are two great truths about this — no one will get rich from it and it’s money that will go right back into the economy helping people meet their day-to-day living expenses.”

Many employers and employees pushed back when addressing Sens. Marshall, Karen Peterson, D-Stanton, and Gerald Hocker, R-Ocean View, forecasting a catastrophic effect on Delaware business interests, which would in turn wreck the lives of many already struggling low wage earners as well.

Near the middle of more than two hours of public comments Thursday, Ms. Diogo said 70 percent of CDCC’s 1,000 members do not support another increase to the minimum wage. Those members represent 40,000 workers, she said.

If the additional pay was added to workers’ checks, Ms. Diogo said a 94 percent increase in labor costs would evolve by the end.

“There’s not a business that can absorb that increase,” and not pass it on somehow, Ms. Diogo said. Layoffs would surely occur, she said, adding to the state’s unemployment tax.

With thin financial margins of operations already existing, some business owners believe more employee pay will lead to less positions for humans trying to feed their families and pay the bills, and a move toward more automated systems of production. Also, a company’s pay structure would bring wage increases to higher earners as well, some testified.

Struggling to survive

There was support for raising hourly pay, and Delaware Alliance for Community Advancement Darlene Battle repeated several times that 50 cent increases are not too much to ask. Her nonprofit serves 3,000 people a year and realizes their struggles when helping with taxes indicating multiple, low paying jobs held to get by.

There are “a lot of people with degrees” struggling to make ends meet, Ms. Battle said, and higher pay would allow them to “spend more time with their kids, help them with their homework” and lessen the opportunity “to be running in the streets.”

High interest pay day loans just added to the financial pull downward, Ms. Battle said. She hopes a wide range of folks with stakes in the pay issue can “come together and have a discussion” on how best to proceed.

Employed in the Sussex County farming industry, Matt Crockett said he and other co-workers invested themselves in training for special skills to gain a better financial benefit instead of expecting an automatic pay raise.

“The increase would destroy businesses, including my boss,” Mr. Crockett said. He believes a larger minimum wage would put the country “one step closer to socialism and I’m fed up with it.”

Looking forward, Ms. Diogo said that Delaware could be facing a point where “businesses to want to be here or don’t want to come here.”

Several CDCC members spoke against raising the minimum wage, including Janie Libby who opined that a higher minimum wage could cause people to lose motivation in improving themselves by adding job skills, and would pay $30,000 annually to kids making $14.43 hourly.

All views considered

The minimum wage discussion is necessary, Sen. Marshall said, and all views must be considered.

“If you look at the history of growth in the country, if not for growth in elected chambers, this country and state might not have Social Security, Medicaid, Workmen’s Compensation, unemployment insurance …”

Also, Sen. Marshall said, ““There was powerful testimony on both sides of the issue. We heard from a lot of folks who are struggling to get by but we also heard a lot of doom and gloom scenarios laid out. However, the history of this issue shows improving the lives of minimum wage workers has never caused the state’s economy to collapse.”

Speaking in opposition in wage increases was Delaware State Chamber of Commerce representative James DeChene, who noted that enacted raises in Seattle, Los Angeles, Washington, D.C. and New York City have caused small businesses to close or roll back benefits to cover costs.

Minimum wage earners should “learn skills to move up” into job positions that will allow them to succeed later in life, Mr. DeChane said.
Alternative measures through legislation could foster programs to build training programs for lesser skilled employees, he said.

Ray Vincent, whose Vincent Farms in Laurel hires 250 seasonal employees annually – believes that the full minimum wage increase would mean “In four years we’re out of business. We’re broke. It’s over.”

Adding thousands of dollars in labor costs annually would hamper the ability to keep products costs down and compete with out of state farms selling their material, Mr. Vincent said, and “We’re price takers, not makers” when it comes to companies in the market to buy their produce.

Newark resident Wayne Wilcox communicated what he says studies have shown are positive benefits of higher minimum wage – lower employee turnover, more productive employees not working second and third jobs, less need for government subsidies, more disposable income spent, among other factors.

‘A spirited debate’

According to Sen. Marshall, he will bring the proposed legislation to senators on Tuesday, hoping they can move it forward before the next General Assembly break, allowing it to be analyzed by the Joint Finance Committee as a possible component of Gov. Jack Markell’s budget proposal.

Marshall said he plans to bring the measure to the Senate Tuesday so senators can act on it ahead of the annual break to let the Joint Finance Committee review Markell’s budget proposal.

“I expect a spirited debate, but I’m confident that Delaware’s minimum wage workers will prevail,” he said. “I want to get this approved in the Senate so the House can act on it when we come back in March.”

Committee member Sen. Gerald Hocker, R-Ocean View, listened to the opinions and said minimum wage earners should be training to make themselves upwardly mobile and said “If you’re on minimum wage for long, there’s something wrong.” Added labor costs could be addressed through employee cuts to maintain profitability, Mr. Hocker said, and “We need jobs here.”

Opposed to raising the wage, Delaware Restaurant President and CEO Carrie Leishman said an increase would cut many teenagers out of the work force due to needed staff reductions. She said studies have linked teen employment and crime rates and it imperative to keep them out of trouble and “engaged with the community.”

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