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Capitol Correspondence - 04.22.19

Large Companies No Longer Opposing Minimum Wage Hikes: Implications for People with Disabilities, DSP Workforce Crisis

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ANCOR is sharing this article by CNN because the labor market tightening enough for large companies to stop opposing increases to the minimum wage has important ripple effects for the disability community. A tightening market is promising for people with disabilities, who experience higher unemployment rates than their peers with disabilities. ANCOR members have anecdotally shared that labor shortages increase employers’ willingness to hire people with disabilities and offer wage parity. However, increases in the minimum wage could also contribute to the workforce crisis affecting supports for people with disabilities – including supports that help them find employment. That is because state and federal policy-makers do not sufficiently account for the rising cost of labor when setting fixed, non-negotiable Medicaid rates that providers of disability supports rely on to set wages for frontline staff.

As shared by CNN:

“Corporate America has been, shall we say, evolving on the minimum wage in recent years.

Last month, McDonalds — the most recognizable name in America’s lowest-paying industry — announced it would no longer lobby against minimum wage hikes. A few months before that, Amazon proclaimed that it would fully meet activists’ demands for a $15-per-hour baseline and that it would throw its considerable lobbying weight behind an increase in the federal floor. Then, just last week, Bank of America outdid them both, setting its own minimum at $20.

Who is left fighting the case against a higher minimum wage? American small businesses.

As a bill that would raise the minimum wage to $15 by 2024 nationwide awaits a vote on the House floor with 205 Democratic co-sponsors, life in the opposition is getting lonelier for the National Federation of Independent Business, the nation’s largest advocacy group for small companies.


Although the wage premium for working at a large company has decreased over time, big businesses still achieve economies of scale through centralized HR and benefits departments. They also have the upfront capital needed to invest in automation, such as the purchasing kiosks now in place at McDonalds, that will make businesses less subject to labor costs in the future.


Also, in recent years, the minimum wage has been the least of big business’ labor problems. A tight job market has already propelled companies like Walmart and Target to announce several wage hikes, as well as better benefits, for their rank-and-file workers. So far, productivity has improved enough across the US economy to sustain those cost increases without eating into profits. That said, a higher minimum wage could start to compress margins this year, Oxford Economics analyst Lydia Boussour predicts.


The National Restaurant Association, one of the most powerful lobbying groups in Washington, remains officially opposed to the $15 minimum wage bill. Another, the US Chamber of Commerce, declined to comment on the issue.

But national chains have more important issues to deal with at the moment. In particular, they’ve put most of their lobbying firepower into changing the rules around who qualifies as a ‘joint employer,’ which threatens to make franchisors and general contractors legally liable for the labor violations of their franchisees and subcontractors, as well as open them up to union-organizing campaigns. After years of fighting the Obama administration, the business lobby has welcomed new rules proposed by the National Labor Relations Board and the Department of Labor Republican appointees that would mostly close off that possibility.”