Legislative Positions


MINIMUM WAGE INCREASE

Background

Minimum wage is the lowest hourly amount an employer can pay an employee, with some exceptions based on the type of worker. There are both state and federal minimum wage rates. Minimum wage is currently at $7.25 an hour at the federal level and in the state of Delaware. This increase was enacted on January 1, 2012 by the federal government.

Members of the Senate have introduced legislation, Senate Bill 6, to increase minimum wage $0.50 in the state of Delaware by January 1, 2014 and another $0.50 by January 1, 2015. The minimum wage SB 6 cleared with Senate Amendment 2 in the Senate Labor Committee on March 21, 2013, chaired by Senator Robert Marshall (D-Wilmington).

Minimum Wage Talking Points

2013: A Year of Uncertainty and Financial Challenge for Delaware’s Small Businesses

  • This 20% wage increase will cripple your business.
  • All Delaware businesses have been hit with a retro-active hike in Unemployment Insurance back to January 2012 to pay the state’s outstanding federal loan balance to the Unemployment Insurance Trust Fund.
  • All Delaware small businesses have seen a substantial increase (with no long term solution in place) in their Worker’s Compensation insurance for 2013.
  • All Delaware businesses brace for the uncertainty and the added cost pressure of the federal health care law which goes into effect this spring– with the majority of change beginning January 2014.
  • Delaware’s jobless rate took a surprising turn for the worse in December 2012 with more than 30,000 out of work (News Journal, January 18th 2013).

Understand the Facts about Minimum Wage

  • The youth (16-19 year-old) employment rate in Delaware is 25.5 percent. The unemployment rate is 23 percent. (Date via the BLS) (Note that the employment rate is calculated as employed teens divided by the teen population.)
  • A progressive wage hike will slam the door shut for employment opportunities for low-skilled adults and teenagers.
  • For every 10 percent increase in the minimum wage, teen employment at small businesses is estimated to decrease by 4.6 to 9.0 percent (EPI Institute).
  • For every 10 percent increase in the minimum wage, estimates show employment may fall as much as 6.6 percent for young black and Hispanic teens ages 16 to 19 (EPI Institute).
  • According to recent U.S. Census data, only 16.5 percent of minimum wage recipients are raising a family on the minimum wage. The remaining 83.5 percent are teenagers living with working parents, adults living alone, or dual-earner married couples.
  • According to recent U.S. Census data, the average annual salary of a family with a minimum wage worker was $43,000.
  • Raising the minimum wage is an ineffective tool to fight poverty. Programs like the Earned Income Tax Credit are far better at helping low-income Americans.

Restaurant Facts in Delaware

  • Restaurants are the largest small-business employer in the state.
  • Restaurant profits average three cents on the dollar.
  • Restaurants employ 40,000 people in Delaware.
  • 94% of restaurant employees said that restaurant jobs were a good place to get a first job and learn valuable basic working skills.
  • 57% of first-line supervisors/managers of food preparation and service workers in 2009 were of Hispanic origin and 15% were African-American.
  • 88% of restaurant workers said restaurants provide the opportunity to start at the bottom and move up to management. Nearly half of all adults have worked at some point during their lives in a restaurant, and one out of four adults got their first job experience in a restaurant.
  • Delaware Restaurants’ economic impact is $1.3 billion in sales.
  • Every $1 million in sales generated in restaurants creates 34 additional jobs– not minimum wage increases!

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