Chattanooga Considers Raising Minimum Wage

Photo by Michael Fuller.

Photo by Michael Fuller.

Following a larger national trend, Chattanooga city officials are looking to increase the minimum wage for the city despite an existing Tennessee law which prohibits individual cities from raising the minimum wage.

City councilman Moses Freeman called for the raise on Sept. 8, saying that it is high time Chattanooga made the adjustment. He did not specify when he wanted the change to take place or how much the increase should be.

Minimum wage is determined at the state level, but several states, Tennessee included, do not have a set wage and are therefore at the default federal wage of $7.25 an hour.

Tennessee is by no means the first state to consider a minimum wage increase. Several states out west have passed legislation to raise wages, such as California, where minimum wage is set to be raised from $9 to $10 starting in 2016. However, not many states or even cities have actually implemented a higher minimum wage that is in effect right now, and one of the few cities that has is facing difficult repercussions.

Seattle recently raised its minimum wage to $15 an hour, an action that sparked yet another conflict between conservatives and liberals. Soon after the decision to increase minimum wage, a local Seattle magazine published an article seemingly attributing the recent trend in restaurant closures to the impending spike in wages.

Both sides immediately took up arms and were at each other's’ throats in an instant; in reality, a careful reading of the article reveals that it is in fact a speculation about what the effects of the new minimum wage might have on restaurants.

Regardless, the minimum wage increase in Seattle is having an immense effect on the community, and it is not a matter of simply being either good or bad for the economy. Whether a restaurant shuts down or not, the increase is guaranteed to impact the organization, which must adjust and adapt accordingly.

According to the American Legislative Exchange Council, “When the government imposes a higher minimum wage, employers face higher labor costs and are forced to respond by decreasing other production expenses. Some employers make labor-saving capital investments … Other firms may make adjustments such as reducing employees’ hours, non-wage benefits or training.”

According to a 2014 study, the state of Tennessee leads the nation in the percentage of employees being paid minimum wage at 7.4 percent. Back in March, around the same time Seattle made its decision, the state made an effort to raise the minimum wage to $10.10, but this was voted down at an early stage.

The Chattanooga city council has scheduled hearings in mid-October to discuss the possibility of raising the minimum wage. However, the current law prohibiting minimum wage hikes was introduced in 2013, and it has already prevented several Tennessee cities from increasing wages—most notably Memphis in January 2014.

Regardless, Freeman has met with City Attorney Wade Hinton to discuss the matter, and he plans to continue his effort: “I’m not deterred,” he told, “I think we should move forward and examine this.”

Despite the fact that a majority of council members are in support of Freeman and his efforts to raise, the support is by no means unanimous in City Council.

Two council members have expressed opposition to Freeman’s proposal, and councilman Chip Henderson has made it clear that he is not in favor of it. Henderson believes that raising the minimum wage will do more harm than good, and in the long run is a poor decision for the city. It may help those already employed, but does nothing to help the situation of the unemployed, and could even eliminate many available jobs as employers become more efficient in utilizing their workers, therefore using fewer people to do more work.

Councilman Henderson in his objections to councilman Freeman’s proposal claims that the solution to the wage problem is not to simply raise the amount of money being paid to workers, but to create an educational initiative encouraging people to improve their economic situation by acquiring a better and more fulfilling and rewarding job. This long-term response could be just what not only Chattanooga but the entire nation needs to relieve the situations of all those struggling to stay afloat.