WASHINGTON (FNS) -- The supermarket industry lost a major battle last week as the Senate approved a minimum wage hike, and industry trade groups are particularly concerned about the possibility of retroactive enactment.
The Republican-controlled Senate approved a 90-cent increase in the $4.25 federal minimum wage, despite a mammoth battle waged against it by the grocery industry and the rest of the business community.
But the industry wasn't totally on the losing side. The Senate also approved a bill that would permit workers and management to form teams to discuss workplace safety issues. While the industry backed this and the vote was considered a victory for business, the legislation faces a threatened veto from President Clinton.
"We had good news and bad news," said Kevin Burke, vice president of government relations at Food Distributors International.
The wage hike could force grocers to reduce the number of hours minimum wage employees work, eliminate some jobs or even raise prices, industry representatives predict. Tom Wenning, senior vice president and general counsel at the National Grocers Association, Reston, Va., said the most distressing aspect of the two-stage wage hike is the potential that it could be retroactive to July 1, 1996.
The wage hike is identical to one passed by the House of Representatives in May, which set the first 45-cent hike to take effect July 1. The second 45-cent phase of the hike is set to take place July 1, 1997. Harry Sullivan, senior vice president and general counsel of the Food Marketing Institute, Washington, said it was "absolutely out of touch with reality" to propose a retroactive wage increase. He noted that FMI now would work to influence Congress to change the effective date to give employers time to make administrative changes.