WASHINGTON — Retailers are bracing for another financial hit to payroll costs and profits as the last increase in the federal minimum wage rate takes effect today, while advocates maintain it will serve as a big boost to the livelihood of workers, the economy and businesses.
The hourly wage rate will increase to $7.25 from $6.55, the third increase in two years, stemming from legislation enacted in 2007. The change will give a boost to workers in 30 states, Washington, D.C., and Puerto Rico, where the state wage rate is currently lower.
Facing mounting bankruptcies and consolidations due to the recession, many retailers, particularly in the teen retail segment, will feel the spike in wage pressure with the increase.
“Heading into the third and final step, especially in this economy, I think there is a little more concern in the broader business community that this will bring additional wage pressure for companies that are working hard to protect the jobs they have,” said Mark Warren, vice president for tax policy at the Retail Industry Leaders Association, which includes such companies as Wal-Mart Stores Inc. and Target Corp. “So that certainly gives us some pause.”
Rob Green, vice president of government and political affairs at the NRF, which includes such chains as Macy’s Inc. and J.C. Penney Co. Inc., said the impact will vary depending on the size and location of a retailer.
“The record shows that labor-intensive industries such as retailers, restaurants and other small businesses are disproportionately impacted by minimum wage increases,” said Green.
Rep. George Miller (D., Calif.), chairman of the House Education & Labor Committee, on a call with reporters, dismissed the argument many in the business community have raised that a minimum wage increase will lead to a decline in hiring.
“The evidence just isn’t solid,” Miller said. “The fact is an increase in the minimum wage will put more money into workers’ pockets and that worker will put more money into the economy with the spending he does. We hear that argument year after year and there are many studies that refute those statements.”
Labor Secretary Hilda Solis, also on the same call, cited a study conducted by the Economic Policy Institute, a nonpartisan think tank, that estimated an increase in the wage rate would generate $5.5 billion in consumer spending over the next year.
She also said her agency will hire an additional 250 wage and hour inspectors, bringing the total to roughly 900, to police minimum wage and overtime violations across the country. The agency collected $82 million in back wages owed to 107,000 workers in the first half of the year and plans to step up enforcement with the new investigators, Solis said.
“This will give us an opportunity to do more targeted enforcement,” said Solis. “Hopefully, we can work with those employers to prevent those kinds of abuses.”
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)
@heriethpaul and @gracebol have a moment on the @victoriassecret fashion show 2017. See every look from the runway on WWD.com. Link in bio. (📷: @giovanni_giannoni_photo) #wwdfashion #victoriassecret #VSFashionShow
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia