Many workers are off today to celebrate Labor Day in the state of Alabama. But as prices of gas and groceries increase, those who work for minimum wage might want to take advantage of the extra hours.
According to the U.S. Department of Labor, the federal minimum wage is $7.25 an hour, and Alabama operates under that federal pay floor because it does not have its own minimum wage law.
Many businesses in Alabama have struggled to find workers, leading to an organic increase in the amount employers are willing to pay for the help they can get. In fact, the Federal Reserve Economic Data (FRED) ranks Alabama as the state with the sixth-lowest labor participation rate in the country.
Alabama Department of Labor communications director Tara Hutchinson told 1819 News last week that the reasons behind the shortage include a large Boomer population, a large population of people who are disabled, child care challenges, a lack of infrastructure and a lack of employment opportunities in select areas of the state.
Sen. Linda Coleman-Madison (D-Birmingham) said child care is a big factor in why people in her district are unable to work. She supports a state minimum wage that would be higher than the federal minimum wage and believes if people were paid more, they would have a better quality of life by being able to spend more time with family and less time working multiple jobs.
"They can't afford to work," said Coleman-Madison. "I think everybody wants to work. Everybody wants to have a sense of pride and dignity … but the reality of the matter is that they say, 'I don't make enough to pay my bills and take care of my family.' I just think that we are better than that."
While a bigger paycheck sounds like a great idea for workers, employers and eventually consumers can be impacted by a high minimum wage. Small businesses can be significantly impacted if forced to pay employees more per hour. Susan Dubose, the Republican candidate for House District 45, said she opposes a higher minimum wage.
"The cost would be passed onto consumers," said Dubose. "It would cost all of us more in the long run. They would not have the choice except to raise prices and pass the cost onto consumers."
When the issue has been brought up at the state level in the past, Coleman-Madison said there were some opposed to it because they were concerned it would cause businesses to close.
"But many businesses took it upon themselves to raise their minimum wage of what they were paying, and some others tended to follow," Coleman-Madison said.
That's precisely what Dubose says should happen.
"I do not want it raised," said Dubose. "I think we need to let the free market dictate the minimum wage, and honestly, with the labor shortage that we're experiencing right now, the free market has indicated that wages need to go up. It's the law of supply and demand, and so wages have gone up because of the shortage of labor."
Some states have raised their minimum wage to exceed the federal minimum in order to keep up with a higher cost of living. For example, many northeastern states, such as Connecticut and New Jersey, have minimum wages closer to $13 or $14. Those states are also planning to raise their minimum wages to $15 in 2023.
Some national chains that operate in Alabama have also committed to paying workers more. Target pays a minimum of $15 an hour, Walmart pays a minimum of $12 an hour, and Costco pays a minimum of $17 an hour.
To connect with the author of this story, or to comment, email erica.thomas@1819news.com.
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