MINIMUM WAGE DEBATE: Increase will hurt charities, businesses

Recently, the Delaware State Senate voted on an increase in the minimum wage. Despite multiple days of testimony from some of Delaware’s valuable farmers, small business owners and charities, the Senate Democrats pushed through the increase on a party-line vote.

Some of the strongest testimony I heard came from Carolyn Fredricks from the Modern Maturity Center in Dover. She told the senators that this minimum wage increase would result in fewer seniors getting services in the future. Since charities are largely funded by the state, and since the state hasn’t increased funding on their end in years, they will have to reduce their workforce in order to keep operating. It’s just math.

Lawson, David G. by .

David G. Lawson

In addition, we heard from Ray Vincent of Vincent Farms in Laurel and Curt Fifer from Fifer Orchards in Camden-Wyoming, among other farmers, who all said that the proposed increase in the minimum wage would be debilitating, if not fatal, to their businesses, resulting in hundreds of potential job losses.

We also heard from Garrett Grier, owner of Duck In Car Wash in Milford and Seaford, who said the only economic choice he would have following the proposed increase would be to fully automate, and lay off his entire workforce.

The stakes were high, and they were crystal clear. And still, the Democrats voted to force this increase — the highest in the region and one of the highest in the country — on the Delaware economy, knowing full well that it would be our locally owned businesses and our vital charities that would suffer.

I was also taken aback at the tone with which some of my Democratic colleagues spoke of our business owners. Restaurant owners in particular were billed as careless, unethical, and downright stupid, with one senator claiming that restaurants fail because their owners don’t know how to run a business.

There was a deep lack of respect for those who would assume the immense risk of starting a business, and thereby create jobs and teach meaningful skills to otherwise low-skilled workers.

The justification for the increase from those who proposed it is that you can’t live on the minimum wage, and that we need to get people out of poverty by forcing businesses to pay them more. This argument completely ignores reality in favor of more “feel good” legislation, as has been the case too often here in Delaware in the recent past.

The reality is that to pay people more money, businesses have to raise costs across the board. If a worker makes more, but their expenses rise as well, what good has been accomplished?

In addition, the Congressional Budget Office has stated that the benefits of a minimum wage increase accrue mostly to people who are not in poverty. Just 19 percent of the benefits of a $10.10 minimum wage would accrue to those in poverty, and that only 40 percent of workers who earn within 25 cents per hour of the minimum wage work full-time. They also state that 500,000 jobs would be lost if the minimum wage was raised over 10 dollars.

All of these feel-good bills mask the true problem, and that is that Delaware’s economy has driven out all of the good middle-class jobs, and the jobs that have replaced them have all been at the low end of the pay scale. So to mask their failure to develop the conditions for a solid economy, efforts like these are all that remain.

There are many ways to help our fellow Delawareans out of poverty that are far, far better than raising the minimum wage and driving more employers out of business. Our Senate Republican Caucus is developing a full poverty agenda for release in the coming months.

In addition, I and many of my fellow senators have cosponsored a bill to make the Earned Income Tax Credit (EITC) refundable in Delaware, so that we can reward the poorest working Delawareans with a tax cut. The EITC has been hailed by officials nationwide, from both sides of the aisle, as the best way to alleviate poverty while rewarding work.

In addition, we need to provide for the highest-quality educational choices and skills training for our young people, encourage stable families, and promote ideas like Right To Work, so that major manufacturers will look to bring their solid middle-class jobs to Delaware once again.

Real economic growth is the fastest cure to many of our societal ills, but we’re simply not seeing that in the current restrictive, overregulated environment in Delaware.

And this minimum wage increase is another red flag for the few employers that are considering moving to Delaware that we are closed for business.

We look forward to unveiling our poverty agenda later this session so that we can help people work their way out of poverty, obtain the skills they need, and rev up the engine of the economy, while reducing the size of state government.

That, and not a job-killing wage mandate, is the best way forward.

State Sen. David G. Lawson, R-Marydel, serves the 15th District.

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