Editorial
Independent Newspapers (Northeast Independent, South County Independent, RI), January 8, 2015
As of Jan. 1, the state’s minimum wage is $9 per hour, up from $8. Rhode Island joined 20 other states in boosting the minimum wage for workers at the bottom, including Massachusetts, Connecticut and Vermont. It’s worth noting the federal minimum wage is just $7.25 per hour.
At $7.25 per hour, a 40-hour-per-week employee’s gross income totals about $15,000 per year; at $9 per hour, the gross total is $18,720 annually. Those working minimum-wage jobs in Rhode Island – service sector positions in the retail, fast food, child care and hospitality industries, to name a few – typically work multiple jobs to make ends meet, and may rely on public assistance at taxpayers’ expense. ...
Frequently, we receive editorial content from the American Forum, a nonprofit media group, in which small business owners from across the country have voiced support for increasing the minimum wage. While opponents say wage hikes will lead to job cuts, the arguments of business owners who have already raised wages are compelling – and make it clear that boosting incomes is a step toward improving our state’s economy.
Chris Sommers, co-founder of Pi Pizzeria and Gringo Mexican Restaurant, said he raised the minimum wage at his restaurants in several states to $10.10 – without raising prices – because “employees couldn’t afford to buy the pizza they put so much effort into for our guests.”
“Business owners don’t create more jobs when they have more money in their own pockets thanks to low wages,” he wrote. “We create more jobs when other people have more money in their pockets to spend at our businesses. More working Americans walking around with money to spend is what fuels this economy and creates more consumer demand.”
He noted that increased payroll costs were balanced by reduced employee turnover rates, increased productivity and greater employee morale and customer satisfaction.
“We lost employees before because they couldn’t afford to fill their tank with gas to get to work, or make a car repair,” Sommers wrote. “Employees who can make ends meet stay longer, are less stressed and are more productive. Too many people forget that the lower the wage, the higher the employee turnover, which costs businesses time and money in recruiting and training new workers.”
Roger Smith, president and CEO of American Income Life Insurance Company, said full-time workers earning the federal minimum wage in 1968 would comparatively make $7,700 per year more than their modern counterparts, adjusting for inflation.
“As consumers, workers with money in their pockets provide a boost to sales at Main Street businesses,” Smith wrote. “...You cannot have a strong economy or fulfill the promise of the American Dream when most Americans are running in place or falling behind while the richest Americans pull further away from the rest.”
Gina Schaefer, owner of A Few Cool Hardware Stores, a group of nine Ace Hardware stores in Washington, D.C., and Maryland, said a $10-per-hour starting wage for sales associates helped her businesses grow to nearly 200 employees, at a time when the country suffered economic downturn.
“Paying better wages helps us attract and retain good employees, increase sales, expand our business and hire more employees,” she wrote. “When the minimum wage goes up it puts money in the paychecks of people who most need to spend it – from making rent to buying things they could not afford before from the grocer, the pharmacy, the shoe store, the auto [mechanic], and, yes, the hardware store.”
“Too many large companies pay wages so persistently low that many of their employees have to turn to food banks or food stamps and other public assistance for the most basic essentials,” Schaefer added. “This means companies that could pay higher minimum wages, but aren’t, are being heavily subsidized by taxpayers.”
Raising the minimum wage is not an anti-business move; it’s a growth tool for businesses. It helps the average worker move away from the federal poverty threshold, and increases the chance that locally earned dollars circulate within the local economy.
It could also help Rhode Island stay competitive regionally: Massachusetts’s minimum wage jumped from $8 to $9 per hour, and will increase to $11 by 2017, while Connecticut’s minimum wage increased from $8.75 to $9.15 per hour and is set to rise to $10.10 by 2017.