Delaware’s senators — Tom Carper and Chris Coons — voted against a nationwide $15 minimum wage, but state lawmakers still push for the same policy at the state level.
“At a time when our economy is still slowly recovering, though, policymakers have a responsibility to be especially mindful of the fragile state of small businesses all across this country — many of which are fighting just to stay open during this unprecedented crisis.” — Delaware Senator Tom Carper.
If it doesn’t work for a nation, how does it work for a state where the majority of employers are small businesses that have recently been hit hard by the pandemic? No other small, rural state has a statewide $15 minimum wage and increasing our state’s labor costs will make us less attractive for businesses. Repeatedly, Delaware state lawmakers are unwilling to accept that legislation and regulations that are anti-business in reality are anti-worker and anti-jobs, and continue to push a statewide $15 per hour minimum wage.
The consequences of this bill are even worse when factoring in the economic impact of the COVID-19 pandemic. Businesses have been struggling and closing, and 10,000 restaurant workers are currently unemployed, along with more than 25,000 Delawareans. Wage mandates at this time would only exacerbate unemployment.
We should be focused on getting people back to work, instead of forcing businesses to roll back hiring or even to let more people go. A 61% increase in the minimum wage in less than 4 years would prevent businesses from hiring new workers, reduce hours of part-time workers, reduce benefits for part- and full-time workers, limit expansions of business, and cause layoffs. Automation via self-checkout, self-service stations, and robotics will be a more attractive and affordable option in the long term.
Delaware is in the bottom in the nation for small businesses and business climate. It took the First State six years to recover from the 2008 recession and the impact of the pandemic is far worse. We should not worsen our poor business climate by mandating wage increases in less than a year. Our small businesses and low-skilled, low-income workers need better education and new skills training programs, not feel good legislation.
Make no mistake, the very people pushing for $15 understand the consequences this mandate presents. When signing California’s $15 minimum wage into law, former California Gov. Jerry Brown said that “Economically, minimum wages may not make sense.”
But feel-good policy isn’t always good. In this case, it hurts the very people it claims to help: workers in transition, disabled workers, former inmates, farm hands, hotel and leisure workers, youth (especially minorities) and the elderly. These jobs will now go to more experienced and attractive candidates, causing homelessness and long-term unemployment as these people are left behind.
Employers that retain workers with the mandated higher wages will inevitably pass that cost on to the consumer. With higher living costs and potentially higher taxes to cover the cost to the state, even those with higher wages would see the benefit diminish. The costs of food, basic necessities, daycare, and more will increase. As employers increase wages for those already making $15 per hour and above, this will cause massive inflation.
A better option would be for state lawmakers to work across the aisle to craft bipartisan policy that actually promotes job growth, support businesses, and strengthen the economy.
Zoe Callaway is the executive director of A Better Delaware.
This article originally appeared on Delaware News Journal: A $15 minimum wage will hurt Delaware’s economy. Here’s why | Opinion