Why Does Minimum Wage Have a New Supporter?

Source: Frederic J. Brown/Getty Images

Source: Frederic J. Brown/Getty Images

The National Retail Federation could change its tune on minimum wage increases if its new chairman has his way. The association, which has, unsurprisingly, lobbied against increases in pay that would adversely affect the businesses it represents, is naming Container Store CEO Kip Tindell as its chairman, and Tindell wants the association to rethink its opposition to wage-increase legislation.

In the past, the National Retail Federation, which represents “discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and Internet retailers from the United States and more than 45 countries,” according to its website, has been vocal about its opposition to such legislation. The world’s largest retail trade association called a Senate bill that would increase minimum wage by 40% “an anti-job tax that would lead to higher labor costs for employers and fewer opportunities for young and entry-level workers.”

“I’m working, frankly, to get the NRF to maybe moderate its view on that,” said Tindell, who currently serves as first vice chairman of the federation and is due to be elected chairman at a conference in New York in January. “It’s unbecoming to speak out against raising the minimum wage.” He plans to get the biggest corporations, like McDonald’s and Walmart on his side, assuming others will follow suit.

So it’s “unbecoming” to oppose wage increases for the employees of all the businesses the federation represents? But does that mean Tindell actually wants to see wage increases that will cause those businesses to re-evaluate their business models when it comes to employee pay?

Evidently he does — at least that’s what his experience as CEO of Container Store shows. Container Store pays workers up to twice as much as the normal retail wage, according to Tindell. In Tindell’s new book, Uncontainable: How Passion, Commitment, and Conscious Capitalism Built a Business Where Everyone Thrives, he wrote that full-time employees at his company make about $50,000 a year. “Our people feel mildly tickled about their compensation,” he wrote. “Most businesses have people who don’t feel good about their compensation. And in the aggregate, the totals for those companies don’t look good either.”

His store, which is based in Coppell, Texas, also provides health-care coverage for part-time staff, and plans to maintain Container Store’s coverage of part-timers, while other stores are making cuts. Walmart, the world’s largest retailer and one of the businesses Tindell hopes to win over to his side of the minimum wage argument, is cutting back on health insurance for employees who work less than 30 hours a week. According to Bloomberg, Walmart has a neutral stance on a federal minimum wage increase.

Tindell is confident that he’ll be able to change minds, saying to Bloomberg, “I get to talk to these guys. … I know they’re going to do it.” But he’s talking about a group that has fervently opposed any legislation that would increase the federal minimum wage.

In April, Senate Republicans blocked the bill that the National Retail Federation called “an anti-job tax.” The Senate voted 54 to 42 on legislation that would gradually increase the federal minimum wage from $7.25 an hour to $10.10 an hour, with Senate Majority Leader Harry M. Reid (D-Nev.), voting against the bill so that he could reintroduce it later, as it’s an issue Obama and Democrats continue to campaign on. While that bill was in progress, the National Retail Federation argued that its businesses were already overwhelmed by having to implement the Affordable Care Act and referred to attempts at wage legislation as “sound-bite politics.”

“Raising the standard of living for low-skill, low-wage workers is a valid goal,” David French, the National Retail Federation’s senior vice president for government relations, said in a statement. “But there is clear evidence that mandated wage hikes undermine the job prospects for less skilled and part-time workers.”

Meanwhile, in April, a survey conducted by the Small Business Majority found that 57% of small-business owners supported the legislation to increase the minimum wage. Of the owners surveyed, 82% pay their employees more than the federal minimum wage, 52% think increasing the minimum wage will boost consumer demand for small businesses, and 54% think raising the minimum wage would decrease pressure on taxpayer-financed government assistance programs to make up for low wages.

It’s unclear whether the National Retail Federation will be receptive to Tindell’s opinions, but the leadership claims to keep an open mind. “We look forward to Kip’s continued leadership in facilitating the larger discussions on a myriad of complex challenges and opportunities that impact retail enterprises of all types and sizes,” National Retail Federation Senior Vice President Bill Thorne said in a statement. “Diverse opinions and perspectives from NRF members are what make our industry strong and our advocacy efforts effective.”

As of August 1, 23 states and Washington, D.C., have minimum wages above the federal minimum wage, according to the Department of Labor.

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