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May 2019

Dealing with a $15 an Hour Minimum Wage

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By Ronnie Miles
Director of Advocacy, NGCOA

On Jan. 16, Rep. Robert Scott (D-VA3) introduced a bill in the House that calls for an increase in the federal minimum wage from $7.50 to $15. On the same day, Sen. Bernie Sanders (I-VT) introduced the same bill in the Senate.

In the House, with little fanfare and deliberation, the Education and Labor Committee voted to report the bill to the full chamber.

This legislation, if enacted into law, would raise the federal minimum wage to $8.55 this year and increase it incrementally over the next five years to reach $15 per hour in 2024. Following 2024, the law would also call for additional incremental adjustments to the minimum wage to keep pace with national inflation.

“The proposal would directly lift the wages of 22.5 million workers. On average, these low-wage workers would receive a $3.10 increase in their hourly wage, in today’s dollars,” according to Economic Policy Institute Senior Analyst David Cooper. “For a directly affected worker who works all year, this equals a $5,100 increase in annual wage income, a raise of 31.3 percent. Meanwhile, another 19 million workers earning more than $15 would also see their wages increase from a spillover impact as employers adjusted their pay scales to the increase. A total of 41.5 million workers would benefit from this proposal, 29.2 percent of the wage and salary workforce.”

For the golf course owner, the proposed legislation will dramatically impact their cost to do business. NGCOA members have shared some of their concerns with us, indicating impact ranges from increased payroll costs from low of $60,000 to a high of $275,000. It is important to note the increase is not just limited to wages, but additional employer share of benefit costs and tax increases. For these owners who are already struggling to remain operational, their recourse will be one of two options, increase the cost of their products and services or reduce the hours and number of employees scheduled to work.

While the proposed increase in wages is spread out over a five-year period, the average annual increase is targeted to be 14 percent. With benefits and taxes, golf owners can expect the increase to be closer to 17 percent. How much will you need to increase your green and cart fees to offset this rise in costs? What will your new food and beverage menu look like? How much will your customers accept before changing their purchasing behavior?

Another very important element of this legislation is it eliminates the current tip offset scale for tipped employees plus it repeals the allowance of paying less than minimum wage for newly hired employees who are less than 20 years of age. For the golf industry, these categories of employees represent a large portion of seasonal hires.

So what can golf course owners and operators do? NGCOA recommends members voice their concerns with their representatives and senators. Let them know that while we support paying our employees fair and competitive wages, mandating $15 per hour wages across the country fails to recognize that not all communities are the same.

Have concerns about this or other advocacy issues? Contact me at rmiles@ngcoa.org.

 

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