Eradicating poverty hurts the economy. Really?

Senate Bill 15 already passed by the Delaware Senate, would raise the minimum wage in Delaware from $9.25 per hour to $15 per hour by 2025.  Here it is important to note that the bill would gradually increase the minimum wage by just over $1 each year starting next year. Specifically, $10.50 by 2022; $11.75 by 2023; $13.25 by 2024 and $15 by 2025.

Nonpartisan groups have provided detailed analyses describing the benefits of raising the minimum wage for Delaware’s diverse population and for the economy, as well. According to David Cooper, senior analyst at the Economic Policy Institute, with the minimum wage at $15, SB 15 would increase the wages of almost “122,000 Delaware workers or approximately 28 percent of the state’s wage-earning workforce.”  Yet, one of Sussex County’s representatives, Ruth Briggs King, 37th District, Sussex County, opposes SB 15 because she believes the bill will hurt business more than help. 

The Southern Delaware Alliance for Racial Justice supports SB 15 for a number of reasons. First, SB 15 would significantly increase the salary of the state’s lowest-paid, year-round employees by 13 percent or $2,800. Second, an increase of the minimum wage to $15 would impact diverse groups; that is gender, people of color and whites. For example, Cooper’s analysis shows that almost one in three women (32 percent) would get a raise from SB 15; nearly 40 percent of African Americans would get a raise and 47 percent of Hispanics. And nearly 50 percent of white workers would see an increase in their paycheck with the passage of SB 15. 

Third, a review of the federal government’s poverty guidelines reveals that more than 52,000 employees whose income would increase with the passage of SB 15 are either in poverty or close to it. As a matter of fact, hiking the minimum wage to $15 by 2025 would give a raise to 82 percent of all working people in Delaware.  

Finally, overall, contrary to Rep. King’s claims, increasing the state’s minimum wage to $15 by 2025 would benefit the First State’s economy, not hurt it. For example, respected research has shown that the positive impacts of higher minimum wages include, but are not limited to, decreases in turnover, longer periods of employment, and reduced costs of recruitment, hiring and training. Moreover, increasing minimum wage of low-income workers increases the spending power of this group in Delaware.  

The Southern Delaware Alliance for Racial Justice urges Sussex County residents and all Delawareans to ask this question: What is the real issue of raising individuals who work out of poverty and providing a remedy to racial and gender pay inequities? Opposition to SB 15 raises yet another question: What is the real explanation for opposing legislation that provides Delaware lawmakers a rational and prudent opportunity to respond to the devasting consequences the state’s low-wage workers have experienced as a result of COVID-19?  Greater income has always been a solution to overcoming difficult economic times for all segments of Delaware’s population.