CHARLESTON, S.C (WCBD) – Local economists and South Carolina government officials say a potential federal minimum wage increase could damage Charleston’s economy.
The House of Representatives passed a bill Thursday that would increase the federal minimum wage to $15 per hour. The bill passed the house with a 231 to 199 vote. Six democrats voted no, one being South Carolina’s Joe Cunningham.
“This jump to 15 dollars is a little bit too much,” Cunningham said.
During a phone interview with News 2, the Congressman said the increase would damage Charleston’s economy. Specifically local businesses and the food and beverage industry by eliminated tipped wages, reducing employee hours and causing price hikes.
“It would completely eliminate tipped wages and restaurant owners we talked to said they would have to raise the menu prices,” Cunningham said. “It just does not benefit the Lowcountry and that is my priority.”
Currently, South Carolina’s minimum wage is $7.25, the federal minimum. The new bill would more than double it. The bill would allow for the wage to gradually increase and by 2025, it would be $15. A Congressional Budget Office study published last week projected that the legislation would raise the wages of 27 million people and lead to 1.3 million fewer jobs, or 0.8% of total employment.
“It’s pretty bad across the board,” Dr. Frank Hefner, an economics professor at the College of Charleston said. Hefner believes the bill would cause more issues for local businesses in Charleston.
“We’ve had problems in the restaurant industry where they couldn’t find enough workers and they raised the wages and still can’t find enough,” Hefner said. “You can say okay let’s raise the wage even more but are the customers going to pay the higher meals?”
Hefner said the bill would also make it more difficult for people to actually get a job.
“Some people won’t get hired, so that becomes a problem,” Hefner said. “So the people that still have their jobs, $15 an hour is nice, but the problem is the entry level people coming in who would normally start at 10 or 12, but then 15 would be the new requirement.”
Paige Bergen, a waitress at Basil in downtown Charleston said although 415 an hour sounds nice it may be too risky.
“I think it definitely needs to be risen,” Bergen said. “I just worry that if it gets raised too much inflation will raise too.”
Some say there is absolutely no problem with raising the minimum wage to $15.
“It definitely hurts business owners but at the same time it benefits the general population,” local business employee, Matthew Leo said.
“It can be expensive down here as well, but we need to pay the people,” local resident, Diamond Giovanni said.
Many do agree the federal minimum wage should increase. Congressman Cunningham and Dr. Hefner say somewhere between $10 and $12 would benefit Charleston’s economy.
The bill is now in the Senate.