Kristen Deptula, Center, with her husband and two children, says paying an hourly wage of $ 15 helped them grow their business in Rehoboth Beach, Delaware.
Little did they know when Kristen Deptula and her husband bought the Canalside Inn in Rehoboth Beach, Delaware in October 2019 that the upcoming summer season in the coastal city would largely be a bankruptcy due to Covid-19.
The innkeepers were able to access federal funding through the paycheck protection program to keep them going.
Deptula also credits another decision to pay its employees a minimum wage of $ 15 an hour to help transition business through the pandemic.
This wage is well above the current state mandate of $ 9.25 an hour. But Deptula, a native of Washington, had seen the higher rate succeed in Seattle.
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“It was just something I thought was good practice,” said Deptula.
Now Delaware is poised to gradually move towards a state minimum wage of $ 15 an hour by 2025 once Governor John Carney signs a bill that the state legislature passed earlier this month.
The move is a push to raise the federal minimum wage from $ 7.25 to $ 15 an hour and hit a roadblock when it wasn’t included in the final US bailout bill. However, it was approved by the House of Representatives.
Meanwhile, other states have raised their minimum wages. Florida is in the process of gradually moving towards a minimum wage of $ 15 an hour by 2026 after voters approved an election last November.
Currently, 22 states have higher minimum wages than Delaware.
However, it remains to be seen whether the anticipated move by the Diamond State to increase that rate could contribute to changes at the federal level.
“I don’t think the Delaware vote will change the momentum much,” said Michael Saltsman, executive director of the Employment Policies Institute.
‘Essential Tool’ for Recovery
Still, groups like Business for a Fair Minimum Wage, a network of business organizations, owners, and executives, welcome the Delaware decision.
A wawa store in Bethany Beach, Delaware, closes.
Stephanie Dhue | CNBC
When the cost of living goes up, people can’t even afford the bare minimums, said Alissa Barron-Menza, vice president of Business for a Fair Minimum Wage. Bottom line: Companies need customers who can afford their products and services, she said.
Getting by on just $ 9.25 an hour in Delaware can be tough, according to the Massachusetts Institute of Technology’s living wage calculator. It shows that in this childless state, a single worker must earn at least $ 15.32 an hour to earn a living to meet all of his or her basic needs.
It is bad for companies and communities when workers cannot even afford the bare essentials.
Vice President of Business for a Fair Minimum Wage
The Delaware Restaurant Association had advocated a change to postpone the state’s minimum wage by a year to give restaurants and other small businesses more time to recover from the lost revenue caused by Covid-19. However, the law was passed without this change.
Barron-Menza points out that the minimum wage was first introduced during the Great Depression to stimulate the ailing economy.
“As we continue to emerge from the pandemic in this current economy, we need that kind of boost again,” Barron-Menza said. “It’s bad for business and communities when working people can’t even afford the bare essentials.”
Potential Invisible Cost
The Delaware pay rise eliminates what is known as the minimum wage for service workers and bartenders, which has proven to be a point of contention in the battle for a higher standard wage rate.
Although some groups of workers across the country have pushed for the complete abolition of the separate minimum wage for tips, they have encountered resistance from some service workers and bartenders who don’t want their tips to be compromised, Saltsman said.
A higher minimum wage is not always unilaterally beneficial, Saltsman said.
Certain industries, such as rural agricultural business in Delaware, could be adversely affected by the change.
Companies facing higher labor costs can take measures such as reducing the number of employees or limiting working hours, which could lead to lower benefits and other ancillary costs.
“It kind of makes up for the cost, and I think that cost is usually borne by the staff,” Saltsman said.
Rehoboth Beach, Delaware, is a city on the Atlantic Ocean.
DenisTangneyJr | iStock | Getty Images
Canalside Inn, which hosts corporate retreats and events, was successful in giving employees a minimum wage of $ 15 an hour.
The higher wage rate was instrumental in keeping the inn’s first employee during the pandemic, Deptula said.
“I really feel that because she had the stability of $ 15 an hour, she was able to figure out what her life goals were,” said Deptula of the clerk, a pediatric nurse who still helps out from time to time.
The inn now has five employees, which has helped get this summer season underway as people are vaccinated and eager to travel.
“We have really happy team members,” said Deptula. “I think it’s partly because they don’t have to worry about where their next paycheck is coming from and they have more stability.”
Sarah Titus, owner of the comic book store in Wilmington, Delaware, said she supported the move to a $ 15 minimum wage.
Since she and her partner bought the shop around 11 years ago, they have been paying an hourly wage above the statutory minimum wage.
Your decision has helped retain staff at the store, which requires a lot of knowledge about the comic industry. More importantly, she said, it also helps give the staff some peace of mind.
“We want to know that our people have no problems,” said Titus. “We want them to be fresh for the day and not stressed about paying their bills.”