February 08, 2016

[Sen. McDowell & Sen. Sokola] Minimum Wage Hike is Right for Workers and Economy


When we think back to 1968, most of us reflect on the tumult facing this nation — an unpopular war raging in Vietnam, along with a bloody chapter of the civil rights movement here at home.

But it was also a time when our economy was thriving — for everyone.

In terms of purchasing power, America’s lowest-paid workers never got more bang for their buck than in 1968, when the minimum wage was $1.60 an hour. Gas cost 34 cents per gallon, a gallon of milk was a buck, and a postage stamp was just a nickel.

Today, thanks to legislation we passed in the General Assembly two years ago, minimum wage earners make $8.25 per hour. But with the rise in our cost of living, today’s minimum wage offers a more diminished purchasing power than that $1.60 did 38 years ago. Even with falling fuel prices, a gallon of gas today averages $1.80 per gallon, while milk is $3.31 a gallon. And today, it will cost you 50 cents to mail your rising rent check or utility bill.

In routinely opposing legislative efforts to raise the minimum wage, Republicans caution us about interfering with the inner workings of the so-called free market. But surely they’d recoil at the very thought of paying a $22 an hour minimum wage, which is exactly what we’d have today if we simply sat back and allowed it to grow at the rate of inflation over all these years.

Of course, the more likely outcome of the laissez faire approach backed by Republicans would be much more frightening. If the minimum wage hadn’t been increased legislatively since 1968, our lowest-paid workers would be taking home a mere $12.80 a day.

In 2014, when we raised Delaware’s minimum wage to $8.25, we were warned over and over again about how it would cost Delaware jobs. And yet in these last two years, Delaware has added more jobs than in any other two-year period in the history of our state. To the surprise of no one, we heard the same refrain last month on the Senate floor from those who lined up to oppose Senate Bill 39, which would incrementally raise Delaware’s minimum wage to $10.25 an hour in 2020.

While Delaware’s recent history belies those arguments, let’s look at Seattle’s decision to raise its minimum wage to $11 per hour. Immediately after the increase took effect, the reactionary local economy shed 1,000 low-wage, fast food jobs. The minimum wage naysayers had a field day with that single data point. But a study by the St. Louis Federal Reserve Bank revealed that, in the six months that followed, there was a net increase of 900 jobs in that sector of Seattle’s economy, because suddenly there were more people eating out more often, splashing new cash thanks to the higher wages they were now earning.

There’s no reason to think that anything different would happen here — especially given Delaware’s recent track record of job creation.

As our wage gap continues to grow, more and more Delawareans are finding themselves mired in poverty — making the upward mobility to the middle class harder and harder to achieve. In 1968, the middle 60 percent of American earners took home 52.3 percent of all earnings. The most recent data from the Federal Reserve suggests that number has dropped below 35 percent.

The rich are getting richer, the poor are staying poor, and the middle class is shrinking, all while Republicans stoke unfounded fears about job losses that never come to fruition in a desperate defense of their debunked trickle down approach to the economy.

We know increasing the minimum wage requires asking our small business owners to pay a little bit more, but it’s essential to giving those who make up the foundation of our economy a better shot. And putting a few more dollars in the pocket of our lowest wage earners means they’ll have that much more to spend in Delaware’s shops and restaurants. It’s a concept Republicans seem to understand implicitly when they’re cutting taxes, but amnesia seems to set in when we start talking about the minimum wage.

Many opponents of raising the minimum wage argue that it should be viewed as a “training” wage rather than a “living” wage; that the only people working minimum wage jobs are high school and college kids dipping that first toe in the workforce while remaining dependent on their parents. But data included in the state’s Low-Wage and Service Worker Task Force report shows that 20 percent of Delaware’s entire workforce earns the minimum wage and, of that group, a third of them are 40 or older.

Prior to our Jan. 27 vote, a number of farmers testified before the Senate, concerned that the spike in minimum wage would force them to automate their longtime family businesses just to stay afloat. An increase in baseline wages wouldn’t just cost them jobs, it could cost them their family’s livelihood. But that’s why Delaware’s minimum wage law offers an exemption for agricultural employers, because we understand the uniqueness of that sector and how intrinsic its traditions are to the fabric of Delaware.

On the Senate floor, a lobbyist for the Chamber of Commerce, which opposed Senate Bill 39, suggested raising the minimum wage ought to be viewed as a question of a math rather than a question of morality. It was troubling to hear that the chamber, for all its influence, feels like morality has no place in the decisions we make as a body.

We are elected to ensure our state government maintains its moral compass, and doesn’t turn its back on Delawareans who work hard, pay their taxes, and simply want to be able to feed and care for their families. And we also have a moral obligation to our taxpayers, who deserve better than to see their dollars funding corporate welfare, allowing the big box chains that rake in billions to pay wages so low that their employees are forced to turn to social safety nets like food stamps and Medicaid.

Senate Bill 39 now heads to the House of Representatives. We hope our colleagues there share that same moral compass and vote to send the legislation to the governor’s desk.


-Senators Harris B. McDowell III and Dave Sokola


This Op-Ed was featured in Delaware State News.