BOWIE, Md.—A trade group representing tire dealers across the country is coming out against the idea of raising the federal minimum wage from $7.25 to $15 per hour over time.
The Tire Industry Association has signed on to a letter to federal legislators expressing concern about the Raise the Wage Act of 2021.
"Small businesses, ravaged by the COVID-19 pandemic, are struggling to keep their doors open and keep employees on payroll. More than doubling the federal minimum wage presents a significant obstacle to ailing small businesses trying to survive the pandemic," the letter states.
TIA, with more than 13,000 members, represents companies both big and small and many of them have four or fewer locations.
It's these smaller shops that would have the most difficulty handling an increase in the federal minimum wage—especially under the current economic circumstances brought on by COVID-19.
"Small businesses are having a really hard time competing right now," TIA CEO Director Roy Littlefield III said. "It's a very challenging time."
"You are getting hit with a lot of things and it just cuts into the bottom line, especially now. It's not like you are making more money. You are lucky to be anywhere close to where you were last year and last year anywhere close to where you were the year before," he said.
Pushing the federal minimum wage higher would cause smaller tire dealers to have to cut back on employees to cover the higher costs of the remaining workers, Littlefield said.
Any increase to the minimum wage also would impact workers who already are making more money. That's because as the lower-paid workers receive more money, the higher-paid workers also would expect a bump in compensation, he said.
Larger companies, across industries, would have an easier time coping with minimum wage increases because they can spread the added costs over a broader sales base and survive. This can add to the potential of smaller firms not surviving such an increase while the larger players continue to operate, the CEO explained.
A total of 31 organizations signed on to the letter sent to House Committee on Education and Labor and the Senate Committee on Health Education, Labor, and Pensions. Signers include TIA, Automotive Service Association, Specialty Equipment Market Association and the Service Station Dealers of America and Allied Trades. The National Onion Association also opposes the idea.
Bill sponsors say nearly 32 million workers would receive a salary increase.
"Even before the COVID-19 pandemic, the $7.25 federal minimum wage was economically and morally indefensible," said U.S. Rep. Robert Scott (D-Va.) said in a statement. "Now, the pandemic is highlighting the gross imbalance between the productivity of our nation's workers and the wages they are paid."
"Let's be clear: The $7.25 an hour federal minimum wage is a starvation wage," U.S. Sen. Bernie Sanders (I-Vt.) said in backing the bill. "No person in America can make it on $8, $10, or $12 an hour. In the United States of America, a job must lift workers out of poverty, not keep them in it."
While the federal minimum wage is $7.25 per hour, about half of the states already have a higher minimum wage. Some cities also have taken it upon themselves to increase the minimum wage within their borders to significantly higher than the federal rate. They include Seattle, San Francisco, San Jose, New York and Washington D.C.
TIA does not support any increase in minimum wage at this point, even at a figure lower than $15 per hour.
"It's a challenging time and I think they are losing sight on what a small businessman does," Littlefield said. "A lot of times, legislators have never had to make a payroll and have never been on that side of the business."
