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Minimum wage hike passes Delaware House committee

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A bill to raise Delaware’s minimum wage to $15 an hour by 2025 passed its first test in the House of Representatives on Wednesday. | DBT PHOTO BY JACOB OWENS

DOVER – The push to hike Delaware’s hourly minimum wage to $15 by 2025 was greenlighted by a House committee Wednesday after a three-hour public meeting.

Over objections from Republican lawmakers and some small business owners during Wednesday’s meeting, members of the Democrat-led Economic Development Committee released Senate Bill 15 in an 8-5 vote along party lines.

SB15 would raise the minimum wage by more than $1 per year beginning in 2022.

About 150,000 Delawareans would be impacted by the bill, including 35,000 workers currently earning the state’s base pay of $9.25, according to the state labor department. Agriculture and farm workers would be exempt from the bill under Delaware’s labor laws.

Sen. Jack Walsh meets with SEIU workers protesting for a $15 minimum wage outside the statehouse in January 2020. Walsh has renewed the push in this year’s legislature. | PHOTO COURTESY OF WALSH OFFICE

“I would like to say the pandemic, right now, it highlights the gross imbalance between the productivity of our workers and the wages they are paid,” said the bill’s sponsor, State Sen. Jack Walsh (D-Stanton), after Democratic representatives argued that front-line workers like grocery clerks were not being fairly compensated under the current minimum wage.

SB15 swiftly cleared the Democrat-controlled Senate on March 18, 10 days after Walsh introduced the legislation. Rep. Bryan Shupe (R-Milford) urged members of the committee to not release the bill Wednesday before making financial projections on how the increase will impact taxpayers and the private sector.

“I think it’s economically immoral not to have more data to find out what this is going to do to our larger economy in the state of Delaware,” Shupe said. “Currently we have no analysis on the local level.”

Delaware is facing mounting pressure to increase its base pay, as surrounding states including New Jersey, Maryland, Virginia and New York have all passed legislation that will gradually raise the minimum wage to $15 by or before 2025.

SB15 puts Delaware on an aggressive pay bump schedule compared to its Mid-Atlantic neighbors. Maryland, for example, has a slower timeline for employers with fewer than 14 workers, giving them an additional 18 months to reach $15 an hour. New Jersey has a similar provision for small employers and seasonal workers. It also spaces out wage increases over six years before reaching $15, versus Delaware’s proposal of just four years.

“It’s simply too much, too fast and too steep,” said Carrie Leishman, president of the Delaware Restaurant Association, adding that eateries are still not operating at full capacity. “The restaurant industry cannot absorb the increases.”

Anita Wheeler Bezy said her Dover bakery may not survive if SB15 passes.

“$15 an hour would be detrimental to us, and we would have to raise our prices and our products quite a bit,” said Wheeler Bezy, who owns La Baguette Bakery. “Dover does not want to spend a ton of money on a croissant, or a baguette. We would have to shut down or lay off a bunch of employees.”

Raising the minimum wage is as complicated a debate as it is contentious, with proponents admitting that while $15 an hour is not a silver bullet for a livable wage, it still puts more money in the pockets of low-income workers. On the other hand, opponents argue the bill will hurt the very people it is meant to help.

“This bill is a choice between more people going back to work, and fewer people going back to work,” said Tyler Micik, manager of public policy for the Delaware State Chamber of Commerce.

“Currently, 40% of those unemployed have been unemployed for seven and a half months or longer, and this will only be exacerbated by an increase in the minimum wage.”

Some residents told committee meetings they are working in other states that guarantee better pay. Tatum Schutt, a 19-year-old college student, said the state’s low wages are driving young people like her away from Delaware, and resident Rachel Gregoire told lawmakers that she struggled to find a higher-paying job in Delaware, despite earning several master’s degrees and having previously made six figures.

“The highest pay I was offered in Delaware was $12.50 an hour,” Gregoire said during Wednesday’s meeting. “I would have loved to support Delawareans through the pandemic with my experience in education technology, but I wouldn’t have been able to afford my commute and childcare. Instead, I got a remote job out of state.”

Multi-state disability service providers like Quality Management Associates are also struggling to retain Delaware workers.

“We must now worry that our Delaware employees will request to be transferred to other states that we serve because the rate of pay is so much higher,” said Elizabeth Drobit-Blair, CEO of Quality Management Associates of Delaware. “Our struggle to find Delaware qualified staff will get even harder if that happens.”

On the flipside, the New Jersey branch of Drobit-Blair’s organization has seen a “dramatic decrease in turnover,” she said, with staff staying longer due to consistent funding increases that she largely attributed to the state’s minimum wage law.

Delaware’s minimum wage proposal would impact nonprofits, including some of the state’s largest service providers. Rep. Michael Smith (R-Pike Creek Valley) asked the Comptroller General during Wednesday’s meeting how much the wage hike would cost those organizations – and in turn the state through its Grant-in-Aid program.

That estimate was not available during the meeting, but nonprofits have previously testified that SB15 could cost them hundreds of thousands more each year, potentially cutting into their staffing and services.

“If the state’s minimum wage is increased without a significant increase in these reimbursement rates, it will result in a loss of services to people with disabilities in the state,” said Verna Hensley, vice president of public affairs at Easterseals, a national disability services provider with locations in Delaware.

Hensley said her organization supports the goal of SB15 but urged the state to include in its budget more funding for Easterseals services so that direct support professionals can earn a livable wage without sacrificing needed services.

SB15 now heads to the House Appropriations Committee, where legislative members will discuss the bill’s fiscal impact on the state. If approved there, it would head to a House floor vote.

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