Mt. Vernon Register-News

Opinion

May 8, 2014

Wage increase killing business

The fight over the minimum wage, which President Obama and Democrats hope to make a centerpiece of this year’s midterm elections, comes down to two simple arguments. Obama says low-income working Americans deserve a raise, while Republicans say raising the minimum wage would cost jobs.

It was a mostly theoretical argument until Feb. 12, when Obama signed an executive order raising the minimum wage for employees of federal contractors to $10.10 an hour from $7.25.

“This will make a difference for folks,” Obama said at a White House signing ceremony. “Right now, there’s a dishwasher at Randolph Air Force Base in Texas making $7.76 an hour — $7.76 an hour. There’s a fast-food worker at Andrews, right down the street, making $8.91 an hour. There’s a laundry worker at Camp Dodge in Iowa making $9.03 an hour. Once I sign this order, starting next year, as their contracts come up, each of them and many of their fellow coworkers are going to get a raise.”

Obama’s order does not take effect until January 1, 2015. But there are signs it is already having an effect — and it is not what the president and his party said it would be.

In late March, the publication Military Times reported that three McDonald’s fast-food restaurants, plus one other lesser-known food outlet, will soon close at Navy bases, while other national-name chains have “asked to be released from their Army and Air Force Exchange Service contracts to operate fast-food restaurants at two other installations.”

Military Times quoted sources saying the closures are related to the coming mandatory wage increases, with one source saying they are “the tip of the iceberg.”

The closures, real and contemplated, are a serious concern to 40 Republican members of the House Armed Services and Education and Workforce committees, who this month wrote Labor Secretary Thomas Perez asking that the mandatory increase not apply to some businesses on military bases.

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