Katz Questions Minimum Wage Boost: Concerns About Business and Jobs Losses

Katz questions minimum wage boost
Expresses concerns about business impacts, job losses

For Immediate Release Jan. 26
Contact Patrick Jackson at 744-4046

DOVER – Saying he’s worried that a proposed increase in the state’s minimum wage could actually cost jobs and possibly close some businesses, Sen. Michael Katz broke with the majority of his Democratic colleagues and voted against the increase.

However, West Wilmington Democratic Sen. Robert Marshall’s bill was OK’d on a 12-9 vote and is now headed to the House for consideration.

“Sen. Marshall’s intentions are noble,” Katz said. “I think we all feel for the people on the lowest rungs of the economic ladder who are suffering through these hard times. But I fear that this well-intentioned increase may actually wind up hurting the very people it’s supposed to help.”

If approved by the House and signed by Gov. Jack Markell, the state’s minimum wage would go up by $1 per hour. The increase would take place in two steps. It would go up 50 cents an hour to $7.75 on Jan. 1, 2013 and another 50-cent per hour increase would kick in starting in January 2014. The state’s minimum wage, which typically has been higher than the federal rate of $7.25 per hour since the 1990s, has mirrored the federal rate since 2009.

Katz questioned whether enough consideration had been given to issues, such as the economic impact of the increase’s effects on small businesses and their tight profit margins as well as its overall effect on operating costs and a business’ hiring and firing decisions.

“I don’t think we’ve looked at how this will play out in the economy,” he said. “This could force a lot of small businesses to either close or lay people off. That makes things doubly hard on the people getting laid off because they usually don’t have the kinds of skills that make it easy to find another job, which is hard enough in our current economy.”

In an effort to stall the Bill’s progress, Katz moved on the Senate floor for a roll call to table the Bill. The Bill was subsequently not tabled by a 9-12 vote.

“When the fed is saying it’s going to hold the line on interest rates because it’s concerned that the recovery that seems to be getting started is fragile,” Katz said. “I think it should serve as a cue to the rest of us that we need to be mindful that things are fragile and not take steps that could jeopardize that recovery.”