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NGA Opposes Push for $15 Federal Minimum Wage

Association says provision could harm small business
Photograph: Shutterstock

The House Education and Labor Committee early Feb. 10 approved a portion of the Democratic COVID relief proposal that includes a provision to gradually raise the federal minimum wage to $15 an hour by 2025—a measure The National Grocers Association said would harm small businesses and the Congressional Budget Office warned could cost 1.4 million Americans their jobs.

“NGA strongly opposes increasing the federal minimum wage to $15 per hour because it would harm small businesses and reduce food access in disadvantaged communities,” the association wrote in a letter to committee Chairman Robert “Bobby” Scott and Ranking Member Virginia Foxx.

The minimum wage measure will be merged into President Joe Biden’s $1.9 trillion economic relief package before heading to the full House for a vote. The legislation is expected to pass the House before being taken up by the Senate, where the provision’s chance of approval is more uncertain.

“While we are willing to support an increase in the federal minimum wage, more than doubling the current hourly rate is impractical for a large portion of NGA’s members, many of whom are small, independent businesses serving lower cost of living geographic regions across the country,” wrote Chris Jones, SVP of government relations and counsel for NGA. “In response to a drastic increase in the minimum wage, many independent supermarkets would struggle to compete or accelerate the pace of automation in their stores and create an unlevel playing field between large and small businesses.”

Biden and proponents of a minimum wage increase argue raising the threshold would lift many workers out of poverty and provide pay increases to essential workers who have served the nation amid the pandemic. The nonpartisan Congressional Budget Office in a study released Feb. 8 said raising the federal minimum wage to $15 an hour by 2025 could deliver raises for 27 million workers and lift 900,000 Americans above the poverty threshold, but it also warned the policy could cost 1.4 million Americans their jobs over the next four years. It also said higher prices for goods and services—stemming from the higher wages of workers—would contribute to increases in federal spending.

Economists are divided on the effects of the $15 minimum wage, with some looking at the patchwork of state and local increases and finding little job loss relative to nearby areas with lower minimums but others saying jobs losses tied to a $15 minimum wage could be more severe, especially in states with a relatively low cost of living, The Wall Street Journal reported.

Twenty-nine states have raised their minimum wages above the federal $7.25 limit.

In anticipation of Senate action, NGA led a meeting Feb. 9 between West Virginia grocers and Sen. Joe Manchin’s (D-W.Va.) legislative staff, urging the senator to oppose the $15 minimum wage. As a moderate Democratic senator from a conservative state, Manchin is seen as the potential lynchpin to Senate approval of a $15 federal minimum wage, the association said. It is instead urging Congress and the Biden administration to identify a more workable and realistic federal wage policy that allows independent supermarkets to continue to invest in their companies, employees and communities.

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