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State, Small Business Chambers at Odds over Minimum Wage

The S.C. Chamber of Commerce opposes raising the $7.25 minimum wage, saying an increase can negatively affect job creation. The leader of the S.C. Small Business Chamber of Commerce supports increasing the hourly minimum to $10.10, accompanied by tax credits for small businesses.

The minimum wage is increasing in 21 states this year, affecting more than 3.1 million workers, according to theEconomic Policy Institute. South Carolina is among five states that do not have a minimum wage. The District of Columbia’s $9.50 is the highest, and two states, Georgia and Wyoming, are the lowest at $5.15.

While Congress has voted down efforts to increase the $7.25 national minimum, President Barack Obama continues to push for $10.10. Last year following the State of the Union address Obama signed an executive order requiring federal contractors to pay their federally funded employees at least $10.10 an hour.

Frank Knapp, president and CEO of the 5,000-member small business chamber, said city and county officials in South Carolina have the authority to require the same of contractors they pay.

“We would like the mayors and county officials of this state to use the legal power they have right now to require any vendor doing business with that government to pay a higher minimum wage,” Knapp said. “They can do that tomorrow.”

He said cities and counties “cannot raise their own minimum wage in their own jurisdiction” but the state cannot stop them from such an arrangement with contractors.

S.C. chamber spokeswoman Julie Scott said in an email that a government-mandated minimum wage increase forces businesses to make adjustments for the added cost, such as “reducing hiring, cutting hours, reducing benefits and/or increasing prices for goods.”

Scott said that if the minimum wage was increased, “employees currently being paid more than the minimum wage would then be at the new minimum wage. Therefore salaries would have to be increased for all employees essentially.”

Congressional Budget Office study showed the increase to $10.10 nationally could cause 500,000 jobs to be eliminated while raising the incomes of 16.5 million workers.

Knapp said the economic impact of a higher minimum wage would be similar to reduced gasoline prices. He said the economy is doing well and that is at least partly due to “putting more money in the pockets of the average person and they are spending it.”

“It does not hurt the economy,” Knapp said. “Your average worker in South Carolina is probably losing ground.”

He said small businesses depend on people having disposable income.

Minimum wage bills filed in the Legislature would raise the hourly minimum to $10.10, set a statewide vote on a constitutional amendment that would set the minimum $1 above the federal minimum wage and allow for cost of living adjustments, set the minimum $1 higher than the federal minimum with cost of living adjustments included and set an advisory referendum on the 2016 general election ballot.

Reprinted with permission from Columbia Regional Business Report. See original here.

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