Is the Next Big RI State House Battle the $15 Per Hour Minimum Wage?

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Wednesday, January 31, 2018

GoLocalProv News Team

Rhode Island’s big political battle is on. 2018 may be the battle for the $15 an hour minimum wage.

Both sides are armed with data and passion.

On Tuesday, sponsors of legislation for a $15 minimum wage in Rhode Island announced at the State House new legislation that would phase in a $15 minimum wage by 2023.

Under their proposal, the minimum wage legislation would gradually increase the hourly minimum wage from $10.10 to $15 by 2023, and would also gradually increase the hourly minimum wage for employees receiving gratuities, currently $3.89, until it is equal to the non-tipped minimum wage by 2028.

From 2024 onward, the minimum wage would be linked to the cost of living or the consumer price index.

“We can help families in Rhode Island by passing a $15 living wage so that children whose parents work up to 80 hours per week do not have to go to bed hungry,”  said Representative Ranglin-Vassell (D-District 5, Providence). “Some will say, ‘Let them pull themselves up by their own bootstraps.’ People who care about justice say ‘You can’t pull yourself up by your bootstraps if you can’t even afford boots.’”

But, Mike Stenhouse who heads the RI Center for Freedom and Prosperity cited new research conducted the University of Washington at the direction of the City of Seattle.

“Research from Seattle, where $15 minimum wage mandates have already been implemented for years, prove how misguided this policy push is: the very people they hope to benefit, are the very people who end up being hurt, as their work hours, or their jobs outright, are reduced,” said Stenhouse. “Clearly, any claim of an overall societal benefit comes directly from the land of make-believe.”

“A ‘very credible’ new study on Seattle’s $15 minimum wage has bad news for liberals,” reported the Washington Post in June.

The University of Washington study commissioned by the City of Seattle after it had phased in a $15 an hour minimum wage found that the impact of the $15 an hour minimum wage has been primarily negative.

“It reaches a markedly different conclusion: employment losses associated with Seattle’s mandated wage increases are in fact large enough to have resulted in net reductions in payroll expenses – and total employee earnings – in the low-wage job market,” wrote the authors.

“Consequently, total payroll fell for such jobs, implying that the minimum wage ordinance lowered low-wage employees’ earnings by an average of $125 per month in 2016. Evidence attributes more modest effects to the first wage increase. We estimate an effect of zero when analyzing employment in the restaurant industry at all wage levels, comparable to many prior studies,” said the report.

READ THE REPORT HERE 

Manufacturers May Be Hit the Hardest

One of the brightest segments of the RI economy has been manufacturing — it has fueled much of RI’s job growth in 2017.

David Chenevert, Executive Director, Rhode Island Manufacturers Association said the impact would be devastating.

“Let me give you some facts. Most manufacturers do not pay minimum wage, they pay .75 to $1 more [an hour] on average,” said Chenevert.

“So let’s assume [what a manufacturer pays] is $12 an hour currently,” said Chenevert. “So the difference from $12 to $15 — I would have to give that same increase to all my employees, regardless. So If I have 60 employees, that’s [an increase] of $120 a job a week, times sixty employees.  That’s $7,200 a week.  Times fifty weeks a year, that’s $360,000.”

“I can’t pass that along to customers, with a company of 60,” said Chenevert. “For most companies, that would put them out of business.”

“I say let’s educate people for better jobs,” said Chenevert. “The business community [in Rhode Island] is taxed $13M a year for training, for job development. So how do we get them better jobs?”

“We’re working so hard right now to create more jobs — [an increase in minimum wage] would just stifle that,” said Chenevert. “Workers are paid to learn at $11, $12 an hour. If they learn fast enough, and want to increase fast enough to provide for their families, they can.”

“I don’t believe raising the minimum wage,” said Chenevert. “Just look what happened with McDonald’s [with increases in minimum wage]. They just came up with kiosks.”

Advocates Argue the Need is Great and Impact is Minimum

“That’s why we are fighting day in and day out to make sure that if you work full time or even double time as my student’s mom does, you should never live in poverty,” said Ranglin-Vassell.

“We continue to live in a period of tremendous income inequality. At a time where CEOs earn about 335 times that of the average worker and corporations make huge profits, their employees struggle to make ends meet,” said Senator Jeanine Calkin (D-District 30, Warwick). “We need to stand by working families and fight for a living wage of $15 an hour, which our legislation would implement over the next 5 years.  Not only would we be supporting the hard-working people of our state, but raising the minimum wage would stimulate the economy by increasing consumer spending.”

According to the nonpartisan Economic Policy Institute, 165,000 Rhode Islanders would be affected by the increase. Approximately 65,000 children in the state have at least one parent who would be affected. Rhode Island’s Economic Progress Institute estimates that a single adult needs $20,500 per year to meet basic needs. A single-parent family needs $52,932 and a two-parent family requires $58,054 to raise a toddler and a school-aged child.

See the minimum wage in each state HERE.

Rhode Island Facts

Share of workforce directly benefiting: 6.2%

Type of increase: Legislation

New minimum wage as of Jan. 1, 2018: $10.10

Amount of increase:$0.50 Total workers directly benefiting: 30,000

Total increase in annual wages:  $44,335,000