Minimum Wage Debate Taking Center Stage
President Obama and Congress are talking about it. More than 12 states are considering it and several more have already done it. And workers around the country are rallying about it. What is ‘it’? Raising the minimum wage.
The White House got the ball rolling on the current discussion by including it in the State of the Union speech, with President Obama declaring that “no one who works full time should have to live in poverty.” On Black Friday, protests were held at several Walmart stores to draw attention to the issue, and in December, fast-food workers in hundreds of U.S. cities staged a day of rallies to demand higher wages.
The current rate of $7.25 per hour was last increased in 2009. While Washington remains gridlocked on the issue, several states, as well as some localities, saw increases approved last year go into effect on January 1. Some were modest increases, but New Jersey voters approved a minimum wage increase of $1.00 to $8.25 and California lawmakers raised that state’s to the highest in the nation at $10. Click here for an overview of the minimum wage changes taking place in 2014. This year, 12 states and the District of Columbia will be considering minimum wage hikes through legislation or ballot initiatives.
Proponents of the increase argue that hiking the minimum wage is not only necessary to improve the lives of millions of workers and their families, but that it also improves the economy by increasing purchasing power and creating more stability for the middle class. However, opponents believe that an increase disproportionately affects small businesses and that such a move would be counterproductive by decreasing opportunity for those young and lower-skilled looking to enter the workforce. Economists cannot agree on the effects of a minimum wage increase. Some studies report that higher minimum wages lead to higher unemployment because employers cut labor costs by offering fewer hours and fewer new jobs. However, other reports indicate little to no negative effects.
One thing for certain is that the debate is not going away any time soon. As Chambers of Commerce it’s an issue we can’t afford to ignore as it affects nearly every business sector in some way. At ACCE, we’d love to know what you think? Have you started talking about the issue internally or with your board and policy committees? Do you have an existing policy position on minimum/living wage? Email us with your chamber’s take on the issue at Chickerson@acce.org.