Delaware Gov. John Carney, a Democrat, signed a bill Monday which will incrementally increase the minimum wage to $15 per hour by 2025.
Senate Bill 15, sponsored by Sen. Jack Walsh, D-White Clay, and Rep. Gerald Brady, D-Greenville, passed along party lines in both the House and the Senate earlier this year.
The bill saw support from some businesses and union leaders but was met with opposition from small-business owners and local chambers of commerce.
The current minimum wage in Delaware is set at $9.25 per hour and will remain at that rate until Jan. 1, 2022, when it will increase to $10.50 per hour.
The wage will increase to $11.75 in 2023; $13.25 in 2024; and $15.00 in 2025.
Before signing the bill, Carney said that increasing the minimum wage would “lift up those lower-wage workers so that they can provide the same opportunities for their children that the rest of us can.”
Not everybody was enthusiastic about the bill’s signing. Some argued that the increase was too drastic and came at the wrong time.
“I don’t think anyone disagrees that a person should be paid an honest wage for an honest day’s work, but when you are a business owner you have to put everything in perspective,” said Judy Diogo, president of the Central Delaware Chamber of Commerce.
“If you have a 30-year-old who is applying for a position or you have a 16-year-old who is applying for a position, and you need to pay that person $12 or $13 an hour – who do you think you’re going to hire? Probably the person who has more experience and a better skillset.”
Walsh said that he had sponsored many important pieces of legislation during his five years in office, but that Senate Bill 15 is “the biggest by far.”
“The legislation boils down to one core principle,” said Walsh. “Someone who puts in a hard day’s work deserves to earn enough to keep a roof over their head and food on their table.”
Walsh said that his decision to sponsor SB 15 was easy, citing the principles he says the United States was founded on: “equality, fairness, and taking care of each other.”
Regarding the criticism that minimum wage increases could hurt small businesses and cost Delawareans their jobs, Walsh said that’s “simply not true – not true at all.”
“If you look at almost every instance in which we’ve raised the minimum wage, you see the unemployment rate in Delaware fall or remain flat – you see the labor force participation rate increase or remain flat – and you see Delaware’s GDP grow or remain flat,” Walsh said. “The reason is simple. Putting more money in people’s pockets means more bills getting paid, and more money going into cash registers, which results in a better economy for all of us.”
Walsh said that he drafted SB 15 in close consultation with local business leaders and trade groups.
“The bill is not a question of pro-business or anti-business,” Walsh said. “It’s a simple question of whether you believe in lifting people out of poverty or not.”
Diogo disagreed with the notion that small businesses wouldn’t be negatively affected by the increase in the minimum wage.
“I do believe that there are small businesses that this will hurt,” Diogo said, noting that she believes young people will suffer the most under this legislation.
“I think young people are going to be hurt by it. If you have someone who is 28 years old and someone who is 18, who do you think you’re going to hire and pay that rate?” Diogo asked. “It’s not going to be the person who has no experience and no skill set. I feel bad for our high school and college kids who are trying to get a foothold in the business community and trying to get that first or second summer job.”
Diogo said that increasing the minimum wage to $15 per hour will also affect small businesses that currently pay their more experienced workers that rate.
“Minimum wage is an escalator. So if you have somebody making $15 now, and you’re bringing in new people and paying them $10 or $11 – that person making $15 who’s been with you for five years is going to expect an increase.”
Late in the legislative session last month Republicans introduced eight amendments to SB 15 aimed at easing the minimum wage hike’s burden on small businesses and nonprofits, as well as tracking its economic impact.
The amendments included:
- House Amendment One by Rep. Lyndon Yearick, R-Camden/Wyoming, would delay the changes in pay hikes for everybody by one year.
- House Amendment Two by Rep. Mike Ramone, R-Pike Creek South, would hold minimum wage at $13.25 after January 1, 2024, which the amendment says would be the highest historic purchasing power in Delaware.
- House Amendment Three by Rep. Michael Smith, R-Pike Creek Valley, would give small businesses a break, allow them to pay their employees 85% of the rate established in the bill.
- House Amendment Four by King, R-Georgetown, would allow nonprofits to pay employees 85% of the rate established in the bill.
- House Amendment Five by Rep. Bryan Shupe, R-Milford, would require the controller general to make annual reports to the General Assembly on the actual fiscal impacts of the bill if it becomes law, including costs associated with resulting salary and wage compression issues that were not included in the fiscal note. Shupe is CEO of Delaware Live.
- House Amendment Six by Shupe would require the controller general to prepare annual reports for the General Assembly on the economic impact of the minimum wage increase. This duplication is expected to be removed on the floor.
- House Amendment Seven by Shupe would require the controller general to make annual reports to the General Assembly on the actual fiscal impacts of the law, including costs associated with resulting salary and wage compression. This duplication is expected to be removed on the floor.
- House Amendment Eight by Shupe would require the controller general to give the General Assembly annual reports on the economic impact of the minimum wage increase under the act, if it becomes law.
All nine amendments were promptly shot down by Democratic legislators.
Brady joked he thought there would be 15 amendments introduced.
“It’s my 15th year in the General Assembly – Senate Bill 15 – $15 an hour,” Brady said. “I thought at one point there was going to be 15 amendments on the bill.”
“How do you diminish nine pieces of legislation – nine proposed amendments to a piece of legislation?” Brady asked. “It turned to the A-team.”
Diogo said she wishes the amendments were given a more thorough examination.
“I think all of those amendments have their place,” she said, arguing that the digital format of debating the bill limited public input.
“When you’re talking about a bill of this magnitude, you need to be able to have people in Legislative Hall who can talk to it – who can talk to their senators and their representatives – who can bring people who can give personal testimony,” Diogo said. “When you are given one to two minutes to state your case, I don’t think either the party trying to state their case or the person hearing that information is really getting anything of value. It’s very difficult to present your case in a two-minute or one-minute opportunity.”
Bob Older, president and CEO of the Delaware Small Business Chamber of Commerce, said that a proposal to increase the wage should have waited “at least a year after we came out of the pandemic before any increase” and the increase should have totaled “no more than 50 cents a year.”
“It has already passed and there’s not much we can do about it, but no one is going to see an increase in their pocket. Costs at the registers because of wage and product cost increases will take care of that.” Older said. “I’ve said before, this governor and the state are not small business – TRUE small business-friendly.”
Before putting pen to paper, Carney said, “We’re walking the talk now.”
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