There are multiple economic reasons that a minimum wage hike will be bad for employees, employers and our state’s economy, but the recently passed HB 4283 contains a baffling list of random exemptions that should give every West Virginian pause.
Gov. Earl Ray Tomblin should think twice and veto it.
If a minimum wage hike is such a good idea, why would those that support continue to allow the state’s minimum wage law to exempt nineteen separate job categories from it?
Advocates in the Legislature delivered an election-year wage hike for many West Virginians but also arbitrarily picked winners and losers in the business community by mandating that some businesses pay a significantly higher minimum wage while others do not have to pay a penny more. Worse, it appears that many legislators may not even know that these exemptions are in the bill.
Who suffers from these exemptions? Many of West Virginia’s students, physically- and mentally-handicapped workers, farm workers, theater ushers, summer camp employees, and a dozen other categories of workers are all exempt from the legislation. They will not be receiving a raise and they should be questioning their representatives as to why not.
The West Virginia Legislature even voted to exempt its own staff from the wage increase—because it could not afford it. It’s clear that the legislature understands all too well the economic realities of the minimum wage but has no problem with saddling certain West Virginia’s job-creators with higher costs through not one, but two ten-percent wage hikes over just 21 months.
Among the hardest hit by HB 4283 will be West Virginia’s restaurant industry, which employs close to 75,000 West Virginians. Our restaurants provide critical entry-level jobs for thousands across the state.
Like the state Legislature, the restaurant industry can ill-afford any increases in labor costs. Our businesses have profit margins in the mere 3 to 5 percent range. At the same time, our labor costs take up a third to one-half of our budgets. Our restaurants that provide these crucial jobs can’t afford a 20 percent increase in the minimum wage, especially as we grapple with major cost increases from the Affordable Care Act.
Sadly, when labor costs increase beyond our control there is little choice but to limit job opportunities.
It doesn’t end there. West Virginia’s competitiveness will also take a hit. Every state that borders West Virginia (except Ohio) currently sets their minimum wage at the federal level of $7.25. An $8.75 minimum wage would be the highest in the region. This would give all of our neighbors an economic advantage over us as we outsource our jobs to our neighboring states. In fact, West Virginia’s rate would be so high, Ohio could have a better business environment for years before Ohio’s own indexed wage rate would even reach West Virginia’s new rate.
West Virginia’s minimum wage law contains a baffling list of exemptions, more so than its surrounding states, again, making the state less competitive.
Meanwhile, new questions are emerging about the unforeseen changes and overlooked consequences hidden in this perplexing bill. Just this week, major questions were raised about how this bill could change and impact overtime regulations for minimum wage workers. Currently, many West Virginia employees are covered under the Fair Labor Standards Act (FLSA), and businesses must comply with this federal law for overtime requirements and recordkeeping. Under HB 4283, employers will now be subject to different overtime calculations and onerous paperwork requirements, such as keeping records on an employee for two years after the employee has left the business.
Who knows what other unintended consequences we may discover in this flawed bill in the weeks ahead?
The legislature did not pass a clean and fair minimum wage hike that could be applied across the board without exemption. Gov. Tomblin should use his veto pen and have the legislature go back to the drawing board to create a clean and fair bill that everyone can support.
Dewey Guida is the owner of Dee Jay’s BBQ Ribs & Grille in Weirton, W.Va.