Renewed $15 wage push draws business concern
DOVER – Delaware lawmakers are again pushing to increase the state minimum wage to $15 an hour by 2025, a move that private sector leaders say will hurt already struggling businesses amid the COVID-19 pandemic.
State Sen. Jack Walsh (D-Stanton) introduced the bill March 9, the same week Delaware hit the one-year mark of coronavirus cases that forced businesses throughout the state to shut down.
Senate Bill 15 would gradually raise Delaware’s minimum wage from $9.25, where it currently stands, to $15 over the next four years.
Lawmakers have made failed attempts in the past to hike Delaware’s hourly base pay to $15.
This session, however, 18 House Democrats and all 14 Senate Democrats are co-sponsoring the bill, potentially giving the legislation the necessary push to become law. Gov. John Carney, who has expressed concerns with raising the state’s minimum wage, also signaled that he may be ready to sign a renewed push.
“Delawareans who go to work every day shouldn’t be living in poverty,” Carney said in a statement released with the bill. “As an employer, the State of Delaware has committed to raising wages to at least $15 for all state workers. I want to thank Sen. Walsh and Rep. Brady for their thoughtful work on this legislation, which will gradually raise our minimum wage and support working families across our state.”
The push to $15 an hour has also gained traction with large, national employers with a state presence, including Amazon, Walmart and Target, as well as Delaware’s largest non-public employer ChristianaCare, all of which have already increased their base pay to $15. Unions, including Service Employees International Union Local 32BJ, are also backing the bill.
Here’s how the minimum wage increase would play out, beginning Jan. 1 of each year:
- 2022: $10.50
- 2023: $11.75
- 2024: $13.25
- 2025: $15.00
Since 2014, Delaware’s minimum wage has increased annually by 50 cents an hour, making the proposed increase of more than $1 per year a steeper burden on state businesses than in recent years.
“Anything more than 50 cents an hour is going to be a struggle,” said Bob Older, president of the Delaware Small Business Chamber. “Most business owners understand they’re going to either lay people off, raise their prices or both. So, across the board people are going to see prices skyrocket.”
Proponents of the bill say a $15 minimum wage would help lift hundreds of families out of poverty while keeping Delaware competitive with surrounding states, most of which are on pace to increase their base pay to $15 by 2025.
“On May 1, Delaware’s current minimum wage will be lower than the base pay required in four out of five surrounding Mid-Atlantic states, including New York ($12.50), New Jersey ($12), Maryland ($11.75) and Virginia ($9.50),” per a Delaware Senate Democrats statement made in announcing the latest bill.
Older pointed to Pennsylvania, the only surrounding state that still follows the federally mandated minimum of $7.25, the lowest minimum wage in the Mid-Atlantic.
“If Delaware increases to $15 and Pennsylvania stays at $7.25, we’re going to lose businesses,” Older said. “They’re going to move out of Delaware because the cost of paying employees is going to be less. We’re going to compete on that level.”
Other business advocates say now is not the right time to raise the minimum wage.
“An increase right now could result in more automation, a decrease in rehiring, and price increases,” said Michael J. Quaranta, president of the Delaware State Chamber of Commerce, in a Friday statement.
Quaranta said a better solution would be to invest in programs like Forward Delaware, a federal CARES Act-funded initiative that rapidly retrains unemployed Delaware workers and helps place them into higher-wage careers.
Carol Everhart, president of the Rehoboth Beach-Dewey Beach Chamber of Commerce, said several businesses in the resort area already pay “considerably above” minimum wage and that the marketplace – not the government – should determine the minimum wage.
“That being said, the marketplace in our area – a destination resort – is very competitive. It’s the smaller, new businesses that will be hit the hardest,” said Everhart, adding that the chamber opposes SB15.
“We understand that people need to have a livable wage, but let’s do it right,” Older said. “Let’s do it in smaller increments. They need to do this in a fair and equitable way that’s good for everyone.”
SB15 will be first heard in the Senate Labor Committee on Wednesday, March 17.