On minimum wage, minimum debate

On minimum wage, minimum debate

By Noelle Phillips, The State

January 20, 2007

The push to raise the federal minimum wage has been accepted with a shrug in South Carolina.

Business groups have not opposed the increase. And workers have not rallied to encourage its passage. In fact, only two people showed up Friday for a rally at U.S. Sen. Lindsey Graham’s Columbia office.

The U.S. Senate votes Monday on raising the federal minimum wage to $7.25 an hour over the next two years. The U.S. House already approved it. The increase would be phased in with a 70-cent hourly increase within 60 days and another 70-cent increase within 12 months. The final 70-cent hike would come two years after the legislation is passed.

The federal minimum wage has been $5.15 an hour since Congress last raised it in 1997. However, Democrats vowed to change the minimum wage as one of their first acts after gaining control of Congress.

In South Carolina, a minimum-wage increase would affect about 34,000 workers, or about 3 percent of the state’s population earning hourly wages, according to the U.S. Bureau of Labor Statistics.

Jim Bradley, who teaches economics at the USC Moore School of Business, said the raise would benefit those working at minimum wage and those who earn slightly more.

As for the rest of the state’s work force, the change would not be felt, he said. A raise in the minimum wage wouldn’t bump up overall incomes within the middle class, he said.

And those who would jump to $7.25 from $5.15 an hour still wouldn’t be wealthy with an annual income of $15,080, he said.

“It’s not going to bring that much more spending to South Carolina,” Bradley said.

Still, Bradley said it is time for a raise for America’s lowest-paid workers.

“The people at the bottom of the income scale will be less exploited if you raise the minimum wage,” he said.

As for the business community, few have raised objections to the wage hike.

Frank Knapp, president of the S.C. Small Business Chamber of Commerce, said his group was not forming a position on the debate. His research does not show a $2.10-per-hour wage increase would hurt small businesses.

“Most small businesses aren’t paying minimum wage,” he said. “If you want a really good worker and a skilled worker, you have to be competitive to get them.”

People typically associate fast-food restaurants and retail outlets with the ranks of minimum-wage earners. But Tom Sponseller of the S.C. Hospitality Association said most businesses — including burger joints — pay more.

“When they do it, it is typically starting wage for high school and college kids,” he said.

The typical fast-food restaurant pays $6.50 to $7 an hour, Sponseller said. Those places would raise their wages to correspond with the increase in minimum wage.

Small retailers and restaurants that pay minimum wage to a few employees might find the hike difficult. Instead, they will either raise prices on products or cut hours for employees, Sponseller said.