Amid job-growth stagnation, Delaware minimum wage rising to $15

By Bradley Vasoli

Delaware’s job numbers have stagnated over several years, and a new policy change is set to take effect in the New Year that will make hiring for some jobs even more expensive.

Per a 2021 law, the state’s minimum wage has increased each year to finally reach $15 in 2025. That’s a $1.75 increase over its 2024 level and a $5.75 hike since the new law was enacted four years ago.

The federal minimum wage is $7.25 (and $2.13 for workers who make part of their income in tips). Delaware is among 30 states with minimums higher than the federally mandated rate, which was last raised in 2009, and one of nine states with a minimum wage at or surpassing $15. No state is increasing its hourly wage floor as much as Delaware from 2024 to 2025, though some nearby jurisdictions like Washington, D.C. and New Jersey will have higher minimums ($17.50 and $15.49 respectively).

The change comes amid nearly immobile overall job growth. Nonagricultural employment in Delaware now amounts to 489,100 jobs, barely over the nonfarm total of 485,630 that the Delaware Department of Labor reported in 2018. And in the leisure and hospitality industries where payment of minimum wage is more prevalent than most other jobs, the number of positions fell by 1% over the last year to 52,000.

Meanwhile, the First State’s population has been rising much faster than its employment figure, climbing from 966,985 in 2018 to an estimated 1,051,917 this July.

Does a higher minimum wage suppress job growth?

Some analysts don’t see a higher minimum wage suppressing job growth. The left-leaning Institute for Policy Studies’ Global Economy Project director Sarah Anderson argued the coming increase will benefit both workers and their employers.

Observing that the state’s unemployment is under 4%, she suggested higher pay will help businesses keep well-performing workers rather than bear the expense of training new ones. She cited a review of minimum-wage studies by the labor union-backed Economic Policy Institute finding wage-floor hikes don’t lead to layoffs.

“The wage bump will help thousands of Delaware workers at the bottom of the wage scale cope with rising costs of housing and other basic needs,” Anderson said. “In fact, you could argue that the minimum wage would ideally be even higher, given that [Massachusetts Institute of Technology] experts estimate the wage level needed for a single full-time worker in the state to cover basic cost at $22.63.”

Yet Delaware’s 3.9% unemployment rate, while lower than the 4.2% national rate, still ranks 30th-highest among all states and exceeds that of Pennsylvania (3.5%) whose minimum wage matches the federal level. Michael Munger, a senior fellow at the pro-free-market Independent Institute and a political science professor at Duke University, believes higher wage floors limit job opportunities for the poor and unskilled.

Munger also pointed out that the vast majority of Delawareans will not experience a direct benefit from a wage-floor increase because only 1.5% of Delaware workers earn their state’s minimum wage. Businesses, he explained, generally pay employees higher than the state requires because those employees come to their workplaces with skill sets that businesses find valuable and therefore must pay more to acquire.

Do minimum wage jobs need to provide a “living wage?”

“Other states have tried to increase the minimum wage up to what they call a ‘living wage,’” he said. “The problem with that is, why would a worker who’s 16 years old and just starting out be able to earn a wage high enough to support a family of four in the city of, say, Wilmington? That would be pretty hard; they’re not nearly as productive, and so what minimum wages do is reduce the opportunities for people who are not more productive than the minimum wage implies.”

He noted unemployment among teenage African American males is around 33% and Delaware’s policy is likely to worsen that problem. The only people who will likely benefit from higher minimum wages, he said, are those with more experience and who already enjoy more clout in the job market.

“The people who are harder to pick up are the ones who become discouraged and don’t seek jobs at all and perhaps spend their entire life on public support because they never had the chance to get that job that the minimum wage denied them,” he said.

A related result of this policy is greater reliance on automation in the service industry. Several years ago, Munger recalled, the city of Seattle, Washington, raised its pay floor to $15 per hour and consequently saw kiosks replace many fast-food register workers.

“Because of higher minimum wages, it was so expensive to have someone at that cash register, that person’s gone; they no longer have a job,” he said.