Minimum wage hike proposal stopped by Delaware House panel

Skeptical of raising the minimum wage, Rep. Jeffrey Spiegelman (R-Kenton) painted a hypothetical picture of what a restaurant owner may face if the wage is raised. In order to make ends meet, he told committee members, the owner may have to fire four employees and buy a self-service point-of-sale station, like the one in front of him, which costs $12,000 per year. (Delaware State News/Dave Chambers)

Skeptical of raising the minimum wage, Rep. Jeffrey Spiegelman (R-Kenton) painted a hypothetical picture of what a restaurant owner may face if the wage is raised. In order to make ends meet, he told committee members, the owner may have to fire four employees and buy a self-service point-of-sale station, like the one in front of him, which costs $12,000 per year. (Delaware State News/Dave Chambers)

DOVER — A House committee failed to release to the full chamber Wednesday a bill that would raise the state’s minimum wage by $2 over the next four years.

After the House Economic Development Committee heard arguments and testimony for well over an hour, the bill’s sponsor said the measure lacked enough support to pass. He requested discussion end without a vote.

The legislation remains in limbo and likely will stay there until the session ends this summer, Rep. Gerald Brady, D-Wilmington, said.

Senate Bill 39 would increase Delaware’s wage floor from $8.25 to $10.25 an hour in four 50-cent increments starting in June 2017. The bill passed the Senate 11-8 in January.

Rep. Quinn Johnson, right, (D-Middletown) chats with Rep. Michael Ramone (R-Newark) before the House Economic Development Committee meeting Wednesday afternoon where the issue of raising the minimum wage was discussed and debated.

Rep. Quinn Johnson, right, (D-Middletown) chats with Rep. Michael Ramone (R-Newark) before the House Economic Development Committee meeting Wednesday afternoon where the issue of raising the minimum wage was discussed and debated.

More than 50 spectators packed the room for the dialogue Wednesday, intent on swaying the outcome if possible.

The proposal is backed by many Democratic legislators, while Republicans and small businesses have stood almost unanimously against it.

Gov. Jack Markell, a Democrat now in his last year in office, has not taken a stance on the bill.

Supporters contend that a higher minimum wage — of $2 more an hour — will lift people out of poverty. They say a rising tide lifts all boats, claiming the increase in wages would go back into the state’s economy.

Opponents say the wage hike would result in job losses, higher prices and small businesses closing while making it harder for first-time potential employees to get an entry-level job.

So far, 17 states have imposed minimum wage levels higher than Delaware’s current rate, which is $1 more than the federal wage. No states currently mandate employees be paid at least $10.25, although Washington, D.C., does. Massachusetts and Vermont are the only states phasing in higher rates.

“It sounds great to put money in people’s pockets but I’m worried at what cost it’s going to be to the people who are looking for jobs,” Rep. Jeffrey Spiegelman, R-Clayton, said.

Holding a small automated point-of-sale system like the kind used to place food orders at Royal Farms and Wawa, he called the proposal a “dangerous precedent” that would lead to business owners turning to technology to replace employees.

Backers see it differently.

“At the max, in four years, $10.25. OK,” Rep. Brady said. “Is it a whole lot? Yeah, it’s going to impact some businesses and people are going to be laid off and all of the extremes. All of the extremes,” he admitted.

An opponent to raising the minimum wage, Central Delaware Chamber of Commerce director Judy Diogo listens to members of the public express their views on the subject during the House Economic Development Committee hearing Wednesday.

An opponent to raising the minimum wage, Central Delaware Chamber of Commerce director Judy Diogo listens to members of the public express their views on the subject during the House Economic Development Committee hearing Wednesday.

“And it’s going to be put into someone’s pockets. I will stop you right there and tell you, I can tell you, the money doesn’t go in your pockets at $10.25 an hour. It doesn’t go in your pockets, and if it goes in there it’s not going to stay long. You got bills to pay,” he added.

Rep. W. Charles “Trey” Paradee, D-Cheswold, said taxpayers could save money because many minimum wage workers on welfare would earn enough to no longer require government assistance.

He also appealed to “morality.”

“The disparity between the rich and the working poor in this country has never been greater,” he said. “It’s getting worse practically every day, and it’s just not right. It just is not right.”

Rep. Brady said afterward he anticipated four of the 10 committee members supported the bill, leaving it short of passage. While proponents of an increase still could try to convince their colleagues to change their view, Rep. Brady said the measure likely is dead for the rest of the session.

Lawmakers spoke for about 50 minutes before opening up the hearing to public comment. The majority of speakers were against the bill.

Janie Libby, chairperson of the Central Delaware Chamber of Commerce, said a higher wage floor would hurt both young people just starting out and seniors on a fixed income, as businesses would turn to increased automation and raise prices.

House Economic Development Committee chair Rep. Bryon Short (D-Claymont) listens to statements from businesspersons and other members of the general public during the hearing.

House Economic Development Committee chair Rep. Bryon Short (D-Claymont) listens to statements from businesspersons and other members of the general public during the hearing.

“We will not be able to stay in the vegetable business if this law goes through, point blank,” said Ray Vincent of Vincent Farms. “We’re not going to go out of business — we’re going to find some way to feed my six kids, the fifth generation of our family farm. We’re going to find something to do, but we will not be shipping produce.”

Rep. Valerie Longhurst, D-Bear, said the minimum wage has not kept up with inflation. Adjusted for inflation, the level reached a high in 1968 at $1.60 — equivalent to $11.45 today, according to the U.S. Bureau of Labor Statistics.

The bureau reported about half of minimum wage earners are younger than 25.

Rep. Michael Ramone, R-Pike Creek Valley, spoke for more than five minutes, calling for fewer government regulations, not more.

“The solution to the problem is by allowing businesses to create their own destiny and be able to grow and get bigger and hire more people and pay more people more money,” he said.

Staff writer Matt Bittle can be reached at 741-8250 or mbittle@newszap.com. Follow @MatthewCBittle on Twitter.

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