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John Motley, Senior Vice President for Government and Public Affairs at the Food Marketing Institute (FMI), has sent the following letter to all members of the US Senate:
“On behalf of the Food Marketing Institute (FMI) and your neighborhood supermarkets, I am writing to ask that you vote against any proposal to raise the minimum wage to $6.65 at this time. We will consider any vote to raise the minimum wage to be a "Key Vote" in FMI's annual ratings of Congress, and we oppose efforts to link an increase to tax cuts.

“Like many other industries, the grocery industry continues to feel the impact of a weak economy. During the recession companies in our industry were impacted by consumers who aggressively sought to lower their overall grocery bills by "trading down" to lower-priced items, brands and stores. The economic health of our country continues to be uncertain, and a minimum wage increase of nearly one-third, implemented in only 16 months (as contained in S. 2538, the Kennedy legislation) will hit labor-intensive industries like ours very hard.

“The food distribution industry is facing annual inflation in the cost of providing health insurance in the range of 10-15%. Virtually every company is coping with this increase, and further increasing labor costs due to a minimum wage increase will only compound the problem. Please keep in mind that, while in many areas of the country supermarkets do pay above the minimum wage, an increase does force pressure to raise wages for those above the minimum.

“Because grocery stores typically operate on a razor-thin profit margin of one-percent, increased labor costs are amplified in our industry more than in others. Already facing escalating labor costs, a minimum wage increase will cause many store managers to eliminate jobs in the months ahead by reducing the number of cashiers, baggers or stockers in their stores.”
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