NRF Urges Senate to Reject Minimum Wage Proposal

minimum-wageWashington—Though millions of retail employees might be wishing this was all just a joke, the National Retail Federation (NRF) today fired off a letter to the U.S. Senate hoping to stop a proposed federal minimum wage increase.

Under a proposal from President Obama, the federal minimum wage would rise from its current $7.25 an hour to $10.10 an hour. While the president has allies in the Senate who support the increase, even those from his own party have hinted a compromise might be in order.

But the NRF remains adamantly opposed to any increase, calling an increase “an anti-job tax that would lead to higher labor costs for employers and fewer opportunities for young and entry-level workers.”  The NRF plans to include any votes on the minimum wage as “Key Retail Votes” in its annual voting scorecard used to measure legislative support for the retail industry’s public policy priorities.

Gap, Costco Raise Wages Though

“Raising the standard of living for low-skill, low-wage workers is a valid goal,” NRF Senior Vice President for Government Relations David French said in a letter to the entire Senate. “But there is clear evidence that mandated wage hikes undermine the job prospects for less skilled and part-time workers.”

Moreover, the NRF maintains that any wage increase would come at the least “least opportune moment” since retail employers with small and large businesses alike “already confronting the myriad workforce challenges associated with the implementation of the Affordable Care Act.”

“Policymakers have other tools, such as increasing the earned income tax credit, fixing the tax code, education improvements, immigration reform, transportation funding, and strong trade alliances that will aid in achieving that goal without creating more unemployment,” French wrote.

But all retailers don’t necessarily follow suit. Most notably, following President Obama’s urging for a minimum wage increase, Gap Inc. announced it will set the minimum wage for workers at $9 an hour this year and $10 an hour in 2015.

Costco now pays $11.50 an hour. “Instead of minimizing wages, we know it’s a lot more profitable in the long term to minimize employee turnover and maximize employee productivity, commitment and loyalty,” Craig Jelinek, Costco ceo, said earlier this year.

Other retailers are reportedly considering a wage hike, most pointedly Walmart where U.S. sales have been hurt by falling wages and cutbacks in food stamps and other federal assistance.

As speculation rose about Walmart supporting the increase, the retail giant came out with a statement that its “neutral” on the subject, which supporters believe means it really is against any increase in wages.

But supporters of the increase say it may be in Walmart’s best interests to support the increase since 40% of its shoppers have income less than $35,000 a year, the same low-income segment that could benefit from the increased wage.

“I think more people will wait on the sidelines and not take on additional expenses,” said Ken Perkins, president of RetailMetrics, a retail research firm. “It’s a gamble on Gap’s part.”


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Jeff Prine

Jeff Prine, Editor at Large, Accessories Magazine
Jeff returns as a regular contributor to Accessories magazine. Initially Jeff worked as senior editor at Accessories more than 20 years ago and his love of the industry has followed him until present. Since his tenure here, Jeff has continued to report jewelry, watch and other luxury goods trends as executive editor at Modern Jeweler magazine, fashion director at Lustre, and as contributor on products and trends for consumer and trade publications and websites. In addition to his editorial experience, Jeff also served as an adjunct instructor for accessories merchandising at Fashion Institute of Technology.