COMMENTARY: Raise the minimum wage, raise Delaware’s economy

Former Delaware governor and congressman Mike Castle wrote in an op-ed “Raising the minimum wage is common sense. … When the cost of living goes up, so should wages.”

Along with many other Delawareans I wholeheartedly agree. We need to increase our minimum wage to at least keep up with inflation and the cost of living.

In real terms, the minimum wage is worth less today than it was at the beginning of 1950.

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Drew Serres

So if you were working a minimum wage job back then, you would be doing much better than today.

Delaware’s Senate recently passed SB 39 to raise the minimum wage to $10.25 by 2020, which is still below what the minimum wage would be if it kept pace with inflation.

The federal minimum wage in 1968 would be $10.90 today when adjusted for inflation according to the Bureau of Labor Statistics’ Consumer Price Index. Right now, we’re still stuck at $8.25 in Delaware.

When I’ve talked to people about the minimum wage, most have strong opinions on both sides, however the majority favor raising it.

A 2015 Hart Research Associates poll found that 75 percent of Americans (92 percent of Democrats, 73 percent of Independents, and 53 percent of Republicans) support raising the federal minimum wage to over $12.50 an hour by 2020. SB 39 is a full $2 under this, meaning we could raise Delaware’s minimum wage even higher and still have substantial support.

We can see this unity across the political spectrum as a mix of 14 red and blue states have recently voted to raise their minimum wage (e.g. Alaska, Hawaii, West Virginia, South Dakota, Maryland, Arkansas and Nebraska).

Citizens are responding to the need to ensure a prosperous future for all Americans.

The Economist recently stated “one would expect America … to pay a minimum wage around $12 an hour” considering the wealth of our country and in comparison to other developed countries.

Eighty-two percent of Americans also believe we should tie the minimum wage to inflation so it automatically increases as the price of goods increases.

Most professional economists agree that raising the minimum wage is a good policy decision, according to a University of Chicago poll. In addition, 61 percent of small business employers support increasing the federal minimum wage in stages.

Employers are better served by incremental and predictable wage increases each year, rather than unexpected dips and jumps.

As with all other costs of doing business that increase from year to year, when an employer can plan for additional expenses, they can absorb them better by making strategic choices around costs and pricing.

Not only is the minimum wage broadly popular and makes sense to economists, but it helps uphold our vision for working hard in America.

I know when my parents were raising me, they taught me as long as I worked hard I would succeed in this country. However, for far too many workers this isn’t true.

When I talk to people making the minimum wage, I’ve come to realize most people are adults and are often the primary breadwinners for their families.

These experiences showed me the conceptions around who earns minimum wage are simply not true in today’s world.

In our post-2008 financial crisis world, the vast majority of low-wage workers are adults, rather than teens looking for their first job. The average age of minimum wage workers is 35 or older, and 36 percent are 40 or older. In addition, most work full time and still don’t make enough to feed their families.

I believe anyone who puts in an honest day’s work should receive an honest day’s pay.

One of the reasons a small number of employers pay these low wages is due to the fact that the average taxpayer subsidizes them through public assistance programs.

A Center for American Progress report found if Delaware raised the minimum wage to $10.10, it would save the state approximately $20 million each year just through reduced enrollees in Supplemental Nutrition Assistance Program.

People want to work and are willing to put in tireless efforts for their families. However, right now too many families have to juggle multiple jobs and still cannot make enough to pay for basic essentials (e.g. housing, transportation, food, etc.).

According to the most recent Census Bureau statistics 11.7 percent of Delawareans are poor (the child poverty rate is even higher, at 17 percent), while Delaware had an unemployment rate of 5 percent in December 2015.

Even those who do have a job are still in poverty.

Having such a high percentage of our economy based on low-wage work makes it extremely difficult for families to break out of the cycle of poverty. It also puts a drain on our economy and stalls inclusive economic growth, when so many people cannot afford to spend.

The higher someone’s wage is, the more they will be able to create their own opportunities, which bolsters the state economic situation for everyone.

Raising the minimum wage is the right thing for Delaware now, because it puts us on a path to support workers and their families, small business success, reductions in violence through economic opportunity, and enhance quality-of-life.

Drew Serres is the organizer for Delaware Americans for Democratic Action.

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