Legislature to Consider $15 Minimum Wage

Date: February 13, 2017

Over the last several years, there have been various attempts to establish a minimum wage in Tennessee, and 2017 is no different. Rep. G.A. Hardaway is backing legislation, House Bill 80, that would establish Tennessee’s minimum pay to $15 per hour, reported the Memphis Daily News. This would be more than double the federal rate of $7.25 per hour. Sen. Sara Kyle has the companion legislation, Senate Bill 1411.

NFIB/TN, along with other business groups, is opposed to the bill and plans to fight it during session. Although well-intentioned, these measures end up hurting the people they’re trying to help by driving away jobs.

“If you get a minimum wage increase passed, those lower-wage workers will benefit,” Jim Brown, NFIB/TN state director, told the Memphis Daily News. “On the other end of it, jobs are going to go away.”

House Bill 129 by Rep. Dwayne Thompson/Senate Bill 1095 by Senator Sara Kyle would establish a minimum wage to tipped employees of $2.50 per hour, above the current federal standard of $2.13. NFIB also will oppose this legislation.

Quick facts about the minimum wage:

  • The average household income of restaurant workers who earn the federal minimum wage is $62,507. The majority of restaurant workers who earn the federal minimum wage work part-time and are not heads of their household.
    • Forty-six percent of federal minimum wage restaurant workers are teenagers, while 70 percent are under the age of 25 (Source: Tennessee Hospitality & Tourism Association).
  • Many restaurant employees earn significantly more than minimum wage. Nationally, the median hourly earnings of waiters and waitresses range from $16 to $22 depending on experience.
  • Minimum wage increases negatively impact restaurant jobs and drive up consumer costs.
    • According to an industry survey  conducted after the 2007 federal minimum wage increase, 58 percent of restaurant operators increased menu prices, while 41 percent reduced the number of hours their employees work.
    • Further, twenty-six percent of operators postponed plans for new hiring, while 24 percent of operators reduced the number of employees in their restaurants. Only 23 percent of restaurant operators took no mitigating actions as a result of the 2007 minimum wage increase.
    • According to a study from ValuePenguin, 52 percent of Americans believe that a $15 minimum wage would mean fewer minimum wage jobs. Seventy-eight percent of people also believe raising the minimum wage would increase the prices of goods and services.

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