Higher wages may do more harm says CCEDC president Rick Clifton

Published 12:00 am Saturday, July 20, 2019

With the U.S. House of Representatives approving a minimum wage increase, Covington County Economic Development Commission President Rick Clifton believes the bill could do more harm than good.

The Raise the Wage Act passed 231-199, mostly along party lines. All Alabama Republicans – Reps. Robert Aderholt, Bradley Byrne, Gary Palmer, Martha Roby, Mike Rogers and Mo Brooks – opposed the measure; Democrat Terri Sewell voted in favor of the bill.

The bill would increase the minimum wage to $8.40 per hour this year then gradually over the next six years until it reached the $15 mark. After 2025, the bill would tie to median wages to account for inflation. It would also do away with the separate minimum wage standard for tipped employees.

“You know, everybody wants to see wages increased and see a positive impact on those that get the increase,” Clifton said. “But the thing that we have to realize is if we do that, there have been studies that show you’re going to lose a lot of those low paying jobs.”

Clifton said that the effects of raising the minimum wage can already be seen in society today.

“Look at fast-food restaurants,” Clifton said. “You can go into a McDonalds and not even have to talk to a person to get your food, because they have cut down on people.”

With the increase, Clifton said companies will cut out those jobs that teach people valuable work skills.

“Instead of having people begin at a lower wage, learn how to work and learn what it means to have a job, you’re going to take all of that out of the equation,” Clifton said. “These minimum wage jobs are not intended to be necessarily a life long career. Unfortunately for some folks, it is, but you will lose a lot more jobs than you gain.”

Clifton said companies will figure out a way to meet those higher wages.

“They will either cut employment, they are going to speed automation or drive up their prices,” Clifton said. “They have to figure out a way to pay for it. I just think that it could lead to a lot more bad things than good. I think that Congress has a lot of good intentions, but I don’t think they are thinking about the negative impacts about it.”

The federal minimum wage is $7.25 an hour. Alabama is one of 18 states where workers earn at or below the federal minimum wage. Twenty-nine states have a minimum wage above the federal minimum and six states and Washington, D.C. already have bills in place to gradually raise the minimum wage until it reaches $15 per hour.

The bill now moves to the Republican-controlled Senate where is faces an uphill battle. It is believed Senate Majority leader Mitch McConnell won’t take up the measure but if he did, and in the unlikely event it passed, President Donald Trump has vowed to veto.

The currently $7.25 minimum wage amount was set in 2009.