“We beat back the obstructionists and naysayers to provide opportunity to working people.”
A new law requiring businesses contracted by Wilmington to pay their employees at least $10.10 an hour is expected to cost the city an estimated $50,000 and $65,000 annually to administer.
City Council voted 11-0 Thursday night to increase the minimum pay for employees at firms with city contracts.
City officials expect to generate more wage tax revenue for the city. Officials say the additional costs created by the wage boost is expected to be partially offset by an additional $1,300 to $1,500 in wage tax revenue.
A previous version proposed adding a finance employee to ensure that contractors meet the wage law. That part of the ordinance was nixed after it was determined that not hiring an additional employee wouldn’t impact the legislation, said Councilman Darius Brown, who sponsored the wage increase.
Councilwoman Loretta Walsh voted in support of the ordinance, but said she disagreed with the previous call to add a finance employee.
“I will not be voting for any addition to the allocation list,” Walsh said just before council took action on wage increase. “The law department should work on what’s put into those contracts, rather than the reaction being that another city employee has to be hired.”
The wage increase would apply to contracts that start Jan. 1 or later.
“I’m glad it got passed. It’s about us providing opportunities for people,” Brown said. “We have to make sure people who are employed are able to provide for themselves.
“$10.10 is just a start.”
Councilwoman Maria Cabrera, who voted in support of the wage increase, echoed Brown’s comments.
“I think it’s time we set an example,” Cabrera said. “This isn’t going to make anybody rich, but it’s a wonderful, wonderful start … We have to work on getting the minimum wage up in this country.”
The ordinance mirrors an executive order issued by President Barack Obama in February that raised the minimum pay for federal contractors to $10.10 an hour.
Calls to raise the minimum wage, however, have not received backing from business lobbyists.
New Castle County Chamber of Commerce President Mark Kleinschmidt expressed concerns about the city’s future additional costs because of the more expensive contracts that contractors will demand.
“It’s going to have a domino effect by pushing wages upward across the board,” Kleinschmidt said.
Kleinschmidt also expressed doubts about whether many contractors will benefit from the city’s minimum wage increase.
All of Wilmington’s approximately 1,100 city workers are paid minimum wage or more. Brown previously said that he initially intended to boost the minimum wage of all city workers, but shifted his focus to contractors once he learned that no city workers were paid minimum wage.
Kleinschmidt argues that mandatory wage increases can drive some businesses to save on the additional costs they’ll incur by cutting work hours and holding off on the hiring of additional part-time workers.
“It drives up the cost of business across the board,” he said.