Delaware Senate approves minimum wage hike

Supporters of a minimum wage hike gather at Delaware Legislative Hall in January 2020. The contentious issue has advanced in Dover this year after the pandemic scuttled last year’s attempt. | PHOTO COURTESY OF WALSH OFFICE

DOVER – Delaware is one step closer to raising its hourly minimum wage to $15 by 2025, after the State Senate approved Senate Bill 15 on Thursday afternoon, one day after the Senate Labor Committee cleared the bill following an hours-long public hearing. 

All 14 Senate Democrats voted for the bill, with some like Sen. Marie Pickney saying “it didn’t go far enough,” while all seven Republicans voted against it. It now sets up a House committee hearing and likely a floor vote in the opposite chamber, where passage is not as assured. While all 14 Senate Democrats co-sponsored the bill, only 18 have signed on in the House of Representatives, with 21 votes needed for approval.

State Sen. Jack Walsh (D-Stanton) introduced SB15 on March 9, proposing to raise the minimum wage by more than $1 per year beginning in 2022.

Walsh said during Wednesday’s virtual meeting that the bill is “intended to lift Delawareans out of poverty,” adding that many low-income workers “can’t afford a single day off from work at Delaware’s current minimum wage of $9.25 an hour.”

If the bill is passed, the state’s base pay would increase to $10.50 next January, then to $11.75 in 2023 and $13.25 in 2024 before finishing at $15 in 2025.

Private sector advocates and employers raised several concerns over the steepness of the increase, unintended costs and reduced job opportunities during the two-hour public meeting, with some saying SB15 would harm the lower-income workers it is intended 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.

The state chamber, representing thousands of state businesses, opposed the bill, stating that efforts should instead be focused on workforce redevelopment and training.

“This piece of legislation is one among many bills … that would increase costs for business owners,” Micik said, pointing to upcoming proposals on paid family leave and a state-run IRA program.

If SB15 becomes law, Delaware would join several surrounding states, including New Jersey, Maryland, Virginia and New York, in gradually raising the minimum wage by 2025.

Pennsylvania is Delaware’s only neighbor that still follows the federally mandated wage of $7.25, but last month Pennsylvania Gov. Tom Wolf stated he would renew efforts to increase his state’s “embarrassingly low” base pay to $12 by July 1, with annual increases of 50 cents until also reaching $15 by 2027.

The Economic Policy Institute, a nonpartisan think tank based in Washington, D.C., that supports SB15, reported that a $15 minimum wage would lift the pay of about 122,000 Delaware workers, or nearly 27% of the state’s workforce.

“By 2025 there is not a single county in the U.S. where an individual could afford those basic necessities working full-time for less than $15 an hour,” EPI senior analyst David Cooper said during the meeting, citing a tool the nonprofit uses to calculate the typical costs of all basic necessities for a “modest but adequate” standard of living.

Democrats hold a three-fifths majority in both chambers of the Delaware General Assembly, lending the party greater support this year than in previous legislative sessions when they tried and failed to hike Delaware’s base pay. Gov. John Carney, who in 2019 expressed concerns over raising the minimum wage, recently signaled he also may be ready to sign a renewed push, and has proposed boosting pay for all state workers to a $15 minimum next fiscal year.

Still, the unprecedented nature of the coronavirus pandemic has business advocates and lobbyists – especially those in the food and hospitality industries – pleading with Delaware lawmakers to halt the bill’s passage so that employers can focus on recovering from the economic impacts of COVID-19.

Julie Wenger, executive director of the Delaware Food Industry Council, a nonprofit trade organization representing grocery and convenience stores, said the minimum wage hike would slash youth employment, calling Walsh’s proposed rate of increase “radical.”

“There will be fewer jobs available, including entry jobs for people re-entering the workforce as well as students trying to get their first jobs while still in school” if SB15 passes, Wenger said, adding that employers such as grocery stores would be forced to invest more in automation and less in worker shifts.

While large, national employers with a state presence, including Amazon, Walmart and Target, as well as Delaware’s largest non-public employer, ChristianaCare, have committed to paying their workers $15 an hour, small business owners and nonprofits say the mandate would have deleterious effects on both their workers and their bottom lines, as many would be unable to absorb the costs of the proposed wage hike.

William Sullivan, of the Delaware Hotel Lodging Association, said SB15 will make rehiring difficult for hospitality businesses, while some small business owners worried about the bill’s unintended costs.

A $15 base pay hike would also force Sherm’s Catering owner Sherm Porter to raise the wages of all his employees, including those who make more than $15, out of fairness.

“You have to take into consideration all the costs, not just the cost to raise the minimum wage for people who are earning under $15 an hour,” Porter said during the meeting, adding that his employees make at least $12 an hour.

Delaware nonprofits, like Faithful Friends Animal Society, also say they would be heavily impacted by the bill.

Jane Pierantozzi, the no-kill shelter’s executive director, stated the wage hike would cost her organization an additional $1.1 million through 2025. She asked lawmakers during Wednesday’s meeting to spread the minimum wage increase over more years than the current bill proposes.

A $15 minimum wage could result in a “significant loss of services to people with disabilities” in Delaware, without an increase in reimbursement rates for direct support professionals, according to Verna Hensley, vice president of public affairs at Easterseals, a national disability provider with locations throughout Delaware.

Not all small employers were opposed to the bill though.

Ecolistic Cleaning owner Courtney Sunborn said during the meeting that all employees at her Lewes location will be making at least $15 by the end of 2021. None of them currently make below $14.50.

Sunborn, who began her cleaning service company 19 years ago, said paying a livable wage is “good for business.”

“By paying livable wages, we keep our staff turnover very low,” Sunborn said during the hearing. “It saves a lot of time and money to retain employees who are trained already know our way of doing business. Lower turnover also brings increased morale and productivity, and that’s happier clients.”