Money & Business

Is Minimum-Wage Opposition Beginning to Soften?

By / Jan 27, 2015 (iStock/Thinkstock)

Increases in the minimum wage have often been opposed by business groups and some charitable nonprofits who employ minimum-wage workers. But some organizations at the state level have recently shown more willingness to accept them—conditionally, at least.

The minimum wage is currently having a moment, both in Washington and at the state level.

During last week’s State of the Union address, President Obama made a fresh push to raise the minimum wage to $10.10 an hour. And at the start of 2015, 20 states increased their minimum wages, giving 3.1 million workers a pay boost. At the city level, it’s becoming increasingly popular to bump up wages—despite the threat of legal action by trade groups who oppose the measures.

And while trade groups in industries with large numbers of minimum-wage workers are often vocal critics of wage increases—which they argue often hurt employers, instead of helping employees—there is evidence that at least some state-level trade organizations are willing to moderate their stance, given the right conditions. Two recent examples:

In December, the California Association of Nonprofits (CalNonprofits) released a study showing support for an increased minimum wage at the state level, despite the financial hit that nonprofits might take. Of the 329 nonprofits that responded to the survey, 77 percent of those that had an opinion said they supported increases to the minimum wage. But respondents also pointed to the challenges that higher wages would present, including that funding in many cases would not keep up with higher payrolls. “For many nonprofits, an increase in minimum wage is met with mixed—even agonized—feelings,” CalNonprofits reported. Respondents said they worried about having to cut back on services and would generally want any minimum-wage legislation to include a phase-in period so nonprofits could renegotiate government contracts that help fund their operations.

The New Mexico Restaurant Association, which has generally opposed hikes in the minimum wage, might be willing to support a statewide increase to $8.30 per hour if some conditions were met. “I could support that as long as it went up incrementally and had a preemption. It has to give restaurants time to budget and raise prices and all the things they have to do,” NMRA CEO Carol Wight told Albuquerque Business First. A preemption provision would block individual cities from increasing their minimum wage apart from the rest of the state; such a rule existed in New Mexico until it expired in 2008. Wight added that increases in the minimum wage tend not to hit national chains quite as hard as mom-and-pop shops. “It’s the small, independent restaurants that are hit the worst and hardest and eventually go out of business,” she said. “It’s a bottom-line thing. How much can I raise my prices without losing customers? If I don’t raise my prices, I’m going to lose my business.”

Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. More »

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