Local concerns over proposed $15 minimum wage

GREENVILLE, N.C. (WITN) - President Joe Biden’s COVID-19 relief package includes a provision that would raise the federal minimum wage from $7.25 to $15 if passed.

The proposal, also known as the American Rescue Plan, was outlined but is being discussed and would need the support of all Senate Democrats without GOP support, and some Democrats, including Sen. Joe Manchin (D-W.Va), said they won’t support the hike to$15.00

Arguments over raising or lowering the federal minimum wage have gone on for a long time and if it were to change under the Biden administration, it will be the first change in over a decade.

Economist Jim Kleckley said the argument for raising the minimum wage comes from a current look at the minimum wage of $7.25.

“If you look at the current minimum wage, it’s about [$7.25 per hour] … and you work 40 hours a week for the year, it’s about $15,000 a year,” Kleckley said. “That puts you below the poverty level.”

Kleckley said there’s not as many jobs as there were before the coronavirus pandemic so, from an individual standpoint, the minimum wage would come into effect a little bit but the big deal right now is the pandemic.

Making $15 per hour is different at every state where the cost of living varies.

“A $15/hour wage is very different from a $15/hour wage in New York City,” Kleckley said, adding Congress should consider adapting the minimum wage by the state by looking at the average state wage.

Industries would also have to balance between minimum wage workers with less education and those who had more education which can leave some people without a job.

“If you’re already making above that minimum wage, it more than likely won’t affect you,” Kleckley said. “But if you’re making $16 an hour now, when there are people … they’re making $7.95 or $8 an hour and all of a sudden they go to $15 … you’d probably think you’d need a raise too.”

SMALL BUSINESS IMPACT

For Halo Home in Greenville, N.C., it’s been three years since they’ve been in business. It took hard work amid the pandemic, having to adapt to unexpected change, owner Jessica Ceravone said.

“We’ve been doing Facebook live a lot now, so that way we’re able to reach the community,” Ceravone said. “We’ve been closing the doors and then people can pick up products as well.”

But in order to keep her full staff of nine people, raising the minimum wage to $15 would prevent that from happening as she’d have to pay her staff double what she’s paying now; an option that Ceravone said she can’t afford to do.

“In theory, it’d be great to be able to pay my employees $15/hr,” Ceravone said. “Some of them deserve it, but it’s not something that we can do, and we would not stay in business. You’d have to increase the price of goods, once you increase the price of goods, then most people would shop Amazon, Wayfair, all these other big box retailers and you run the little guy out so there’s just no way for us to be able to compete with that.”

Ceravone said she wants to keep her staff working, including college student employees. Her team moves vignettes and furniture every day and does other tasks, such as installing inventory and hosting Facebook lives.

“There’s no way to have a small staff,” Ceravone said. “I have to have a staff of three to four every single day to keep this place put together.”

Ceravone said small businesses may be able to deal with the increase in the minimum wage if given the time to adjust to smaller steps rather than a sudden increase.

Kleckley said he could see states adapting to the $15 hike if it’s done gradually.

“It would hurt less, or people in businesses would be able to plan and adapt more readily to the changes,” Kleckley said. “Even though it’s an extreme increase, basically it’s almost a doubling .... if it’s done gradually over time, hopefully, the business person would be able to adapt more readily to it.”

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