Minimum wage legislation introduced, franchise association responds

March 6, 2013

The debate over the minimum wage has heated up significantly this week. On Tuesday, Senator Tom Harkin and Rep. George Miller introduced a bill to raise the federal minimum wage by nearly $3.

The introduction comes on the heels of President Obama's State of the Union address in January proposing an increase to $9. The current level of $7.25 has been in place since 2009.

Harkin and Miller's bill, however, goes a bit further, asking for a gradual increase to $10.10, as well as automatic annual increases linked to changes in the cost of living.

Harkin and Miller's proposed legislation, the Fair Minimum Wage Act of 2013, would also gradually raise the minimum wage for tipped workers — which currently stands at $2.13 an hour — for the first time in more than 20 years, to 70 percent of the regular minimum wage.

Harkin and Miller were joined on Tuesday by Margot Dorfman, CEO of the U.S. Women's Chamber of Commerce; Andy Shallal, owner of several Washington-area restaurants; Amie Crawford, a Chicago quick-service worker; and Gregory Reynoso, a New York pizza delivery driver.

IFA responds to proposal

In response to the proposal, International Franchise Association Senior Vice President of Government Relations & Public Policy Judith Thorman issued the following statement:

"Franchise small businesses have been hit hard with constant incremental cost increases that make it more difficult for them to expand and create new jobs, such as Affordable Care Act compliance costs, tax increases, hikes in commodity prices and the lack of available capital. Raising the minimum wage by nearly 30 percent will pile on additional costs on the backs of these job creators.

"Franchises provide many Americans their first job. These jobs are many times at the minimum wage, but provide workers their first step on the employment ladder. Increasing the minimum wage will not increase opportunities for these younger entry-level workers, but rather will make it harder for employers to offer these positions by driving up payroll and labor costs, in effect hurting the people proponents of raising the minimum wage want to help."

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