Op-Ed By Rick Poore and Holly Sklar
Columbus Telegram, Banner Press, October 30, 2014. LTE version in Omaha World Herald, Nov 1. Distributed in Nebraska by American Forum
Businesses depend on customers who can afford to buy what they are selling. When a growing number of workers can’t make ends meet because their wages have not kept up with the cost of living, it hurts businesses and it hurts Nebraska.
Five years have gone by since the federal and Nebraska minimum wage was set at $7.25 an hour. Most minimum wage workers are adults – working jobs like health care aides, chain store cashiers and hotel housekeepers. At $7.25 an hour, the minimum wage comes to just $15,080 a year for full-time work.
Nebraska enacted a state minimum wage in 1967, declaring it “the policy of this state (1) to establish a minimum wage for all workers at levels consistent with their health, efficiency and general well-being, and (2) to safeguard existing minimum wage compensation standards which are adequate to maintain the health, efficiency and general well-being of workers against the unfair competition of wage and hours standards which do not provide adequate standards of living.”
The current $7.25 minimum wage does not provide adequate standards of living or protect against unfair competition. It doesn’t cover rent, food, utilities, transportation and other basics. It’s increasingly common to see workers and their families at food banks and homeless shelters or relying on public assistance to get by.
The $7.25 minimum wage is undermining Nebraska’s economy instead of strengthening it.
Nebraskans can change this. Initiative 425 would raise the state minimum wage to $8 an hour on January 1, 2015 and $9 on January 1, 2016. More than 64,000 children have a parent who would get a raise if the minimum wage were raised to $9.
Initiative 425 makes good business sense. In fact, a solid majority of small business owners with employees – including 61 percent of small business owners in the Midwest – support raising the federal minimum wage to an even higher amount of $10.10 an hour, according to a recent national poll. More of the small business respondents identified themselves as Republican than either Democrat or Independent in the scientific national poll of small business employers commissioned by the American Sustainable Business Council and Business for a Fair Minimum Wage.
Small business owners support a higher minimum wage because they know that when the minimum wage goes up, consumer spending goes up as workers turn right around and spend more at local businesses.
When businesses pay a more adequate wage, their employees are more productive and less stressed with worry about how they are going to make rent, repair their car or buy boots for a growing child.
With higher minimum wage, businesses large and small see lower employee turnover, which means lower costs for training new workers. They see better product and increased customer satisfaction.
As Costco CEO Craig Jelinek has said in support of raising the federal minimum wage, “Instead of minimizing wages, we know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty.”
Initiative 425 will boost Nebraska’s economy by nearly $74 million, according to the non-partisan Economic Policy Institute. A higher minimum wage will also reduce the strain on Nebraska’s taxpayer-financed social safety net caused by inadequate wages and unfair competition.
With the federal minimum wage stalled at $7.25, a growing number of states have taken action. Today, 23 states have wages higher than $7.25 and more are expected this year. Voters in Alaska, Arkansas, Illinois and South Dakota will also be considering minimum wage increases next week.
The states that have increased their minimum wage this year have had better job growth than those that have not.
Five years without a raise is already too long. Raising Nebraska’s minimum wage makes good sense for business and for the state economy.
Rick Poore is Owner of DesignWear in Lincoln and a leader in the Main Street Alliance. Holly Sklar is CEO of Business for a Fair Minimum Wage.
Here is a link to the poll:
http://www.businessforafairminimumwage.org/sites/default/files/BFMW_ASBC_Minimum_Wage_Business_Poll_Report_July_2014.pdf
LTE version in Omaha World Herald
Copyright 2014 Rick Poore and Holly Sklar