12:55 pm ET
Nov 5, 2014
EMPLOYMENT

Election Pay Day: Five States Vote to Raise Minimum Wage


  • By ANGUS LOTEN


Along with giving Republicans control of the Senate, voters sent another clear message Tuesday: They support higher wages. Five states on Tuesday approved ballot measures to gradually raise the minimum wage, joining 25 other states in passing such laws in recent years.


Voters in Alaska, Arkansas, Nebraska and South Dakota supported proposals to raise wages for their lowest-paid workers–an issue that is of particular concern for small employers, who tend to operate on thinner margins. Illinois approved a non-binding measure, which won’t immediately change the current law.



Efforts by President Obama to raise the federal minimum wage to $10.10 an hour, from its current $7.25, by 2015, have been stalled in Congress. But support for raising minimum wages has grown in recent years. Indeed, there have been 15 states with minimum-wage ballot measures since 1996 and all 15 passed, according to the National Conference of State Legislatures.


In Alaska on Tuesday, more than two thirds of voters supported raising the minimum wage to $9.75, from the current $7.75, by 2016.

In Arkansas, 65% of voters supported an increase to $8.50 by 2017, from $6.25, while 59% in Nebraska backed an increase to $9 by 2016, from $7.25.


South Dakota had the slimmest margin, with 53% supporting a $1.25 raise next year, to $8.50 from $7.25.


Voters in San Francisco also approved a ballot measure to raise the minimum wage, to $15 by 2018, from $10.74, matching Seattle with the highest in the nation.


Business owner Matthew Patinkin says the minimum wage hike in San Francisco will force him to raise prices at his two Auntie Anne’s Pretzels stores. “When any expense goes up it impacts our business, and this increase is dramatic,” says Mr. Patinkin, who owns a total of 64 outlets of the pretzel chain across seven states, including Illinois, each with a handful of minimum wage earners.


While he supports raising the federal minimum wage, Mr. Patinkin says the increase in San Francisco “is too high and will be a real challenge” to manage in the year ahead. “Some managers will be making less than their workers, so I’ll need to raise their wages, too,” he says, “so it affects everybody across the scale.”


Small-businesses owners recently have shown an increasing recognition of the need to raise base wage rates—whether to attract new talent or ease concerns about pay equity. For instance, in an October survey of 816 businesses with less than $20 million in annual revenue, 51% of small-business owners said they intend to raise the base pay for their lowest-paid workers by as much as 5% over the next six to 12 months. Another 20% of owners said they would raise base wages for the lowest-paid workers by 5% to 9%, and 4% said they would raise wages by more than 4%, according to the survey by The Wall Street Journal and Vistage International.


Even so, the National Federation of Independent Business, a small-business lobby group, has long opposed efforts to raise minimum wages, saying small employers cannot absorb a sharp increase in labor costs because a large share of the earnings go directly toward operating expenses, such as equipment, supplies, inventory and employee wages and benefits.


According to a Congressional Budget Office study, released in February, raising the federal minimum wage to $10.10, from the current $7.25, would reduce employment by 500,000 jobs, or 0.3%, as employers seek to trim labor costs. It estimates the increase would affect 16.5 million workers, resulting in $31 billion in additional wages. Other economists say the move boosts consumer spending, and improves employee retention and job growth.

http://blogs.wsj.com/corporate-intel...-minimum-wage/