Local legislators are hoping to gain enough votes to push for a bill that would raise the minimum wage in the state to $9.80 by 2018.
Following a national trend, some Alabama lawmakers are pushing bills to increase the minimum wage, overlooking the potential cost to small business.
House Bill 42 was introduced in the Alabama House of Representatives on the first day of the 2015 legislative session and would raise the minimum wage to $9.80 by January 2018. Currently, Alabama does not have a state minimum wage and adheres to the federal rate of $7.25 per hour. HB 42 is a state constitutional amendment to create a state minimum wage, which would require a two-thirds majority vote of the House and the Senate.
Under the bill, employees who earn tipped wages would not see their base wage drop below 30 percent of the minimum wage. Alabama’s minimum wage would also be adjusted with the consumer price index every three years after 2020.
“Most Alabama business owners pay more than the minimum wage,” says NFIB/Alabama state director Rosemary Elebash. “The minimum wage gives business owners a threshold to hire, but more importantly, the wage must be earned by the employee to know if the employee has the ability and skill to perform the work necessary to have the business make a profit.”
For most small businesses, a higher minimum wage means owners will have to overcome the additional costs by cutting costs elsewhere. To compensate for the cost of paying higher wages, owners may need to reduce benefits and limit new hires.
“If the legislature and the citizens of Alabama vote for a state minimum wage, business owners would offset the cost by not hiring,” says Elebash.
It is unlikely the bill will gain enough votes for approval in the legislature. On the 2007 NFIB Alabama State Ballot, NFIB/Alabama members voted against raising the minimum wage with 69 percent voting against adopting a minimum wage higher than the federal rate at that time, according to NFIB.
