MINIMUM WAGE DEBATE: Hike is right for workers and economy

When we think back to 1968, most of us reflect on the tumult facing this nation — an unpopular war raging in Vietnam, along with a bloody chapter of the civil rights movement here at home.

But it was also a time when our economy was thriving — for everyone.

In terms of purchasing power, America’s lowest-paid workers never got more bang for their buck than in 1968, when the minimum wage was $1.60 an hour. Gas cost 34 cents per gallon, a gallon of milk was a buck, and a postage stamp was just a nickel.

Today, thanks to legislation we passed in the General Assembly two years ago, minimum wage earners make $8.25 per hour. But with the rise in our cost of living, today’s minimum wage offers a more diminished purchasing power than that $1.60 did 38 years ago. Even with falling fuel prices, a gallon of gas today averages $1.80 per gallon, while milk is $3.31 a gallon. And today, it will cost you 50 cents to mail your rising rent check or utility bill.

In routinely opposing legislative efforts to raise the minimum wage, Republicans caution us about interfering with

Senator Harris McDowell by The News Journal/BOB HERBERT.

Harris McDowell III

the inner workings of the so-called free market. But surely they’d recoil at the very thought of paying a $22 an hour minimum wage, which is exactly what we’d have today if we simply sat back and allowed it to grow at the rate of inflation over all these years.

Of course, the more likely outcome of the laissez faire approach backed by Republicans would be much more frightening. If the minimum wage hadn’t been increased legislatively since 1968, our lowest-paid workers would be taking home a mere $12.80 a day.

In 2014, when we raised Delaware’s minimum wage to $8.25, we were warned over and over again about how it would cost Delaware jobs. And yet in these last two years, Delaware has added more jobs than in any other two-year period in the history of our state. To the surprise of no one, we heard the same refrain last month on the Senate floor from those who lined up to oppose Senate Bill 39, which would incrementally raise Delaware’s minimum wage to $10.25 an hour in 2020.

While Delaware’s recent history belies those arguments, let’s look at Seattle’s decision to raise its minimum wage to

MINIMUM WAGE IN DELAWARE Proposed increase: Under Senate Bill 39, as amended, Delaware’s minimum wage would increase from $8.25 to $10.25 over four years. The proposal would phase the new rate in, raising it by 50 cents on June 1 of each year from 2017-2020. The legislation passed the Senate on party lines ­— Democrats for, Republicans against — last month and has been assigned to the House Economic Development Committee. Current minimum wage: The minimum wage has been at $8.25 since June 1, 2015. How does Delaware compare: Eighteen states have rates higher than Delaware’s current floor, which is $1 more than the federal level. Massachusetts and Vermont are the only states that are phasing in rates higher than $10.25, although Washington, D.C., is also doing so.   Minimum wage with tips: The minimum cash wage payable to employees who receive tips is $2.23 per hour effective Oct. 1, 1996. Delaware is not considering a change to this wage. Minimum Wage Exemptions in Delaware: •Employees in agriculture; •Employees in domestic service in or about private homes; •Employees of the United States government; •Outside commission paid salespeople; •Bona fide executives, administrators, and professionals; •Employees engaged in fishing and fish processing at sea; •Volunteer workers (for educational, religious or non-profit organizations); •Junior camp counselors employed by nonprofit summer camp programs; •Inmates participating in Department of Correction programs.

MINIMUM WAGE IN DELAWARE
Proposed increase: Under Senate Bill 39, as amended, Delaware’s minimum wage would increase from $8.25 to $10.25 over four years.
The proposal would phase the new rate in, raising it by 50 cents on June 1 of each year from 2017-2020.
The legislation passed the Senate on party lines ­— Democrats for, Republicans against — last month and has been assigned to the House Economic Development Committee.
Current minimum wage: The minimum wage has been at $8.25 since June 1, 2015.
How does Delaware compare: Eighteen states have rates higher than Delaware’s current floor, which is $1 more than the federal level. Massachusetts and Vermont are the only states that are phasing in rates higher than $10.25, although Washington, D.C., is also doing so.
Minimum wage with tips: The minimum cash wage payable to employees who receive tips is $2.23 per hour effective Oct. 1, 1996. Delaware is not considering a change to this wage.
Minimum Wage Exemptions in Delaware:
•Employees in agriculture;
•Employees in domestic service in or about private homes;
•Employees of the United States government;
•Outside commission paid salespeople;
•Bona fide executives, administrators, and professionals;
•Employees engaged in fishing and fish processing at sea;
•Volunteer workers (for educational, religious or non-profit organizations);
•Junior camp counselors employed by nonprofit summer camp programs;
•Inmates participating in Department of Correction programs.

$11 per hour. Immediately after the increase took effect, the reactionary local economy shed 1,000 low-wage, fast food jobs. The minimum wage naysayers had a field day with that single data point. But a study by the St. Louis Federal Reserve Bank revealed that, in the six months that followed, there was a net increase of 900 jobs in that sector of Seattle’s economy, because suddenly there were more people eating out more often, splashing new cash thanks to the higher wages they were now earning.

There’s no reason to think that anything different would happen here — especially given Delaware’s recent track record of job creation.

As our wage gap continues to grow, more and more Delawareans are finding themselves mired in poverty — making the upward mobility to the middle class harder and harder to achieve. In 1968, the middle 60 percent of American earners took home 52.3 percent of all earnings. The most recent data from the Federal Reserve suggests that number has dropped below 35 percent.

The rich are getting richer, the poor are staying poor, and the middle class is shrinking, all while Republicans stoke unfounded fears about job losses that never come to fruition in a desperate defense of their debunked trickle down approach to the economy.

We know increasing the minimum wage requires asking our small business owners to pay a little bit more, but it’s

Sen. David Sokola

Sen. David Sokola

essential to giving those who make up the foundation of our economy a better shot. And putting a few more dollars in the pocket of our lowest wage earners means they’ll have that much more to spend in Delaware’s shops and restaurants. It’s a concept Republicans seem to understand implicitly when they’re cutting taxes, but amnesia seems to set in when we start talking about the minimum wage.

Many opponents of raising the minimum wage argue that it should be viewed as a “training” wage rather than a “living” wage; that the only people working minimum wage jobs are high school and college kids dipping that first toe in the workforce while remaining dependent on their parents. But data included in the state’s Low-Wage and Service Worker Task Force report shows that 20 percent of Delaware’s entire workforce earns the minimum wage and, of that group, a third of them are 40 or older.

Prior to our Jan. 27 vote, a number of farmers testified before the Senate, concerned that the spike in minimum wage would force them to automate their longtime family businesses just to stay afloat. An increase in baseline wages wouldn’t just cost them jobs, it could cost them their family’s livelihood. But that’s why Delaware’s minimum wage law offers an exemption for agricultural employers, because we understand the uniqueness of that sector and how intrinsic its traditions are to the fabric of Delaware.

On the Senate floor, a lobbyist for the Chamber of Commerce, which opposed Senate Bill 39, suggested raising the minimum wage ought to be viewed as a question of a math rather than a question of morality. It was troubling to hear that the chamber, for all its influence, feels like morality has no place in the decisions we make as a body.

We are elected to ensure our state government maintains its moral compass, and doesn’t turn its back on Delawareans who work hard, pay their taxes, and simply want to be able to feed and care for their families. And we also have a moral obligation to our taxpayers, who deserve better than to see their dollars funding corporate welfare, allowing the big box chains that rake in billions to pay wages so low that their employees are forced to turn to social safety nets like food stamps and Medicaid.

Senate Bill 39 now heads to the House of Representatives. We hope our colleagues there share that same moral compass and vote to send the legislation to the governor’s desk.

Sen. Harris McDowell is a Democrat representing Wilmington, Bellefonte and Claymont. He co-chairs the General Assembly’s Joint Finance Committee.

Sen. David Sokola is a Democrat representing Newark and Hockessin. He co-chairs the General Assembly’s Joint Bond Bill Committee.

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