Minimum Wage May Wait Until 2014 Action

Posted September 20, 2013 at 1:45pm

The National Federation of Independent Business and the U.S. Chamber of Commerce stand adamantly against a higher minimum wage, and even a package of tax incentives would make the plan a tough sell for many businesses.

But a loose liberal coalition, Business for a Fair Minimum Wage, has focused on the upside of Democratic efforts to raise the current hourly wage standard of $7.25 an hour. Potential benefits, the group argues, include better employee morale, lower turnover and more consumer spending.

The group collected signatures from more than 1,000 businesses and advocacy groups to help propel the last increase in the minimum wage in 2007. Six years later, supporters hope to mount a similar campaign. But first, they must settle a potential split in the Democratic ranks.

The coalition backs a proposal by Sen. Tom Harkin, D-Iowa, to raise the wage to $10.10 an hour over two years, followed by annual inflation indexing. President Barack Obama has proposed to lift the standard to $9, before annual adjustments.

Craig Jelinek, CEO of retailer Costco, backs Harkin’s plan. Costco, the nation’s fourth-largest retailer by annual sales, pays workers an entry-level hourly wage of $11.50.

Holly Sklar, the coalition’s director, says other companies are holding back.

“Some folks are waiting to see what happens,” she said.

Harkin has pushed for a vote by the end of the year to rally support and close ranks. “The vote would settle that,” he said.

For now, senior Democratic aides say Senate Majority Leader Harry Reid of Nevada likely will opt for floor action in 2014.

The delay means that some backers of the 2007 law, such as John Arensmeyer, the head of the liberal advocacy group Small Business Majority, will keep their powder dry awhile longer by simply praising both proposals.

Last spring, a national survey of small-business owners sponsored by Arensmeyer’s group found that more than two-thirds favored linking the minimum wage to inflation. But they were not asked whether the indexing should begin at $10.10 or a lower number.

“We’d like to see some bill come to the floor that has a likelihood of passing,” Arensmeyer said.