Delaware will complete its three-year journey to raising the minimum wage to $15, marking an increase of $1.75 an hour come Jan. 1. This will impact 80,700 Delaware workers, according to the Delaware Department of Labor.
The new minimum wage will apply to thousands of workers around the state, but still the labor market shortage has continued to push employers to pay higher wages to attract and retain workers for jobs without advanced degrees.
Today, common entry level jobs at McDonalds are advertising a starting wage of $15 an hour. The new Target in Middletown is advertising a $16 an hour wage while some associate jobs at Walmart offer $21 per hour.
“Those who aren’t already paying $15 an hour or more are losing out on potential hires due to a tight labor market,” said Tyler Micik, Director, Public Policy & Government Relations, Delaware State Chamber of Commerce.
Micik, who serves as the state chamber’s voice in legislative matters, noted that the DSCC has heard about the struggles businesses face because of inflation and the supply chain issues, causing businesses to pass the expense to the customer.
The Department of Labor found that the minimum wage increase will have the greatest impact on workers in hospitality, which will have 24,700 workers see their pay rise to $15, according to a November report on its estimated impact. The retail sector will see the second-largest impact with 19,700 employees with a pay raise to meet the new minimum wage. Health care and social assistance will follow with 11,900 employees set to now reach $15 per hour.
Delaware is one of 22 states that will increase their minimum wage on Jan. 1, but one of five states that will reach $15 on that date. Maryland has already pushed its minimum wage for all employees to $15 in January, while New Jersey will increase its wage to $15.49. Pennsylvania remains at the federal minimum wage of $7.25.
When passed in 2021, Senate Bill 15 was projected to impact about 150,000 Delawareans, including then-35,000 workers earning the state’s base pay of $9.25. An accounting by the state Department of Labor in 2023 estimated that the number of workers affected by that year’s change was just 60,000 though.
When SB 15 was first proposed and debated, it faced debate and concerns from industry lobbyists, Republican lawmakers, some business owners and chambers of commerce throughout the state.
Opponents of SB 15 stressed that an aggressive increase may see a blowback on businesses, which may be forced to cut hours and positions – and hurting those the bill is intended to help. Restaurant industry advocates also worried hospitality employers would not be able to absorb the wage hike, as they had been hurt the most during the shutdowns in the first year of the COVID-19 pandemic.
Today, the National Federation of Independent Business (NFIB) Delaware Director Mike O’Halloran said those concerns still linger today, much like how inflation “continues to dominate Main Street.” NFIB surveys have found that 11% of small businesses said labor costs were the single most important problem, reflecting little change in sentiment since December 2021.
“When the legislature returns next month, it is important they remember that one-size-fits-all policies only hurt small businesses and should instead advance policies that will create jobs and ignite the state’s economy,” O’Halloran said.
