A step was made toward the first federal minimum wage hike in a decade last week, with the House voting 231 to 199 in favor of the Raise the Wage Act. If it goes through the Senate, it would mean more than doubling the federal minimum wage from $7.25 to $15 by 2025.
“I commend my colleagues for taking this important step towards creating an economy that works for everyone,” Representative Bobby Scott, a Virginia Democrat who introduced the legislation, said in a statement, according to CNBC. “Now, Senate Republicans must decide to either stand with American workers or turn their backs on hardworking people across the country.”
The news source noted, however, that this week the White House warned President Donald Trump would veto the measure if it came to his desk, arguing the administration’s policies are “driving economic growth and increasing workers’ take-home pay far more effectively and efficiently” than the Democratic plan. The White House contended it would “eliminate jobs and reduce total wages for American workers,” according to the report.
On the food industry side, the subject has been a matter of contention as far back as 2012, with workers protesting for more per-hour. McDonald’s recently delivered a turn in its position, which may have assisted the small victory for the act. The fast-food giant has lobbied against raising the federal minimum wage, but recently announced they would stop doing so, while Walmart's CEO previously said that the federal minimum was "too low" where it stands.
On the other hand, there are those that believe that the increase in wages will inevitably impact the consumer as an article by FastCasual covered the responses of foodservice operators.
"This will definitely affect the industry because consumers do not realize that with this increase all expenses are increased," said Kyle Hollenbeck, Co-Founder of Aioli Burgers & Catering in Phoenix, which operates seven food trucks, a restaurant, and a catering business, according to the FastCasual piece. "My payroll doesn't just go up, so do my purveyors which in turn increases the product I am purchasing from them."
Hollenbeck continued by adding that the company was paying $3 more an hour plus tips for its food truck staff before Arizona raised it to the current plan.
"...it made it harder to be competitive with pay," Hollenbeck continued. "We currently charge around $7-$10s for a burger. If this (wage increase) was to happen, I am sure the burgers would need to be sold closer to $15 a piece. We currently have 20-plus employees and we pay between $11-$15 plus tips. Their tips can be as much as $10 more an hour."
The act made it through the House not just with six Democratic votes, but also three Republican ones, raising eyebrows for its future promise.
Will the Trump administration maintain its stance on the act, or make yet another unpredictable turn to push it through for an unprecedented wage hike across the U.S.?
Deli Market News will continue to report on this and any effects it has on our industry.