Two lawmakers, flanked by a restaurant owner and two quick-service employees, held a press conference Tuesday to jointly introduce a bill seeking to raise the federal minimum wage by nearly 40 percent.
The measure would increase the minimum wage from the current $7.25 per hour to $10.10 by 2016. After that, it would be indexed to inflation, which would provide for automatic adjustments every year, according to Sen. Tom Harkin, D-Iowa, and Rep. George Miller, D-Calif., the lawmakers who introduced the bill.
In his State of the Union address three weeks ago, President Barack Obama called for the minimum wage to be increased to $9 an hour. Rob Green, president of the National Council of Chain Restaurants, said Harkin and Miller told President Obama, “We’ll see you and we’ll raise you.”
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Congress last raised the minimum wage in 2007, when it boosted it to its current level from $5.15.
Speaking at the press conference in Washington, D.C., Harkin disputed arguments that a hike in the hourly federal wage would damage the country’s fragile economy and force businesses to lay off workers. He said it was “a myth that every time we raise the minimum wage people get put out of work. There’s no empirical data to support that.” Instead, he added, “Every time we raise the minimum wage, the economy gets stronger.”
Also speaking at the press conference, Anas “Andy” Shallal, owner of the Busboys and Poets restaurants in the Washington, D.C., area, agreed with Harkin, noting that Washington’s minimum hourly wage is higher than the national rate, yet restaurants are opening all the time. However, he said, he has watched as industry wages have remained stagnant.
"I want our business to provide career opportunities. This is not working for anybody — it’s not good for workers or society. I would love to see [this bill pass],” Shallal said.
Amy Crawford, who works for an unidentified quick-service restaurant in Chicago, also joined Harkin and Miller to support the measure, saying that even though she was hired at the Illinois hourly minimum wage of $8.25, “that is not enough to live on. I worry about paying the rent, having enough food…buying clothes for my kids.”
She added that she has received only one 50-cent raise since taking the job and has found almost no opportunities to move into a management position.
The authors of the bill also say indexing the minimum wage to inflation will help protect workers in the future. “It’s a significant change,” Miller said. “Without indexing we fall behind.”
Harkin said the measure would also enable workers who rely on tipped income to make 70 percent of the full minimum wage per hour.
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Industry associations, however, insist that a hike of this size would indeed damage the foodservice industry. Scott DeFife, the National Restaurant Association's executive vice president for policy and government affairs, said the NRA was opposed to the measure.
“It’s the wrong bill at the wrong time,” he said, adding that not only are the mechanics of the bill flawed from the standpoint of its “dramatic” increase in the minimum wage, but in its effort to peg future hikes to inflation. “Indexing has been shown, in most states, to have decreased job creation in certain sectors of the industry,” he said.
DeFife said the legislation would have a major impact on the restaurant business, which is still struggling to rebound from the recession and is facing significant cost concerns as it works to implement health care reform. “Minimum wage is just a proposal,” he said. “The regulatory changes in health care are very real. A minimum wage hike of this magnitude [as] proposed today on top of very real health care costs that will need to be absorbed is very troubling.”
Judith Thorman, the International Franchise Association’s senior vice president of government relations and public policy, said in a statement, “Franchise small businesses have been hit hard with constant incremental cost increases that make it more difficult for them to expand and create new jobs, such as [healthcare] compliance costs, tax increases, hikes in commodity prices and the lack of available capital. Raising the minimum wage by nearly 40 percent will pile on additional costs on the backs of these job creators.
“Franchises provide many Americans their first job — these jobs are many times at the minimum wage, but provide workers their first step on the employment ladder,” she added. “Increasing the minimum wage will not increase opportunities for these younger entry-level workers, but rather will make it harder for employers to offer these positions by driving up payroll and labor costs — in effect hurting the people proponents of raising the minimum wage want to help.”
The NCCR’s Green said he hopes Congress would “focus on other important issues like immigration reform, tax reform and the effective implementation of the healthcare law. I would rather see them focus on those key economic issues.”
According to the U.S. Bureau of Labor Statistics, an estimated 3.6 million people were paid hourly rates at or beneath the federal minimum wage in 2012, down from 3.8 million in 2011.
Eighteen states, including the District of Columbia, currently set their minimum hourly rates above that of the federal government. San Francisco has the highest local rate, at $10.55 an hour.
Contact Paul Frumkin at paul.frumkin@penton.com.
Follow him on Twitter: @NRNPaul