February 11, 2016

18° Fair

$10.10 minimum wage passes in House committee

Published 7:22 pm Thursday, January 28, 2016

House Speaker Greg Stumbo’s (D-Prestonsburg) minimum wage increase bill passed in a House committee Thursday just as it had last year before dying in the Senate, but unlike Stumbo, opponents of the increase brought no data backing up their argument.

Much like Lexington’s Urban County Council decision to raise the city’s minimum wage to $10.10 in a three-year phase in, Stumbo’s bill would raise the minimum wage at the same pace affecting more than 55,000 workers throughout the state who make $7.25 per hour or less.

In 2014, South Dakota, Arkansas, Nebraska and Alaska voted to raise minimum wage in addition to eight other states in the last two years which includes West Virginia, Massachusetts, New York, Vermont and Rhode Island.

Stumbo testified before the House Labor and Industry Committee emphasizing that despite the perception that most minimum-wage workers are college-age adults, more than half of Kentuckians who make minimum wage or less are 25 and older.

 According to the U.S. Department of Labor 2014 Statistics, 62 percent of those Kentuckians are women.

If the state raised the minimum wage, Kentucky would join neighboring states Missouri, Illinois, Ohio and West Virginia and also 29 states throughout the U.S. who have rates above the federal $7.25 minimum wage.

While the increases have passed in other Republican-controlled states, House Republican committee members opposed the bill.

Rep. Jerry Miller (R-Louisville) said if Kentucky raised the minimum wage, the state would have “burger-flipping robots,” and the decision should remain at the federal level.

Kate Shanks of The Kentucky Chamber of Commerce, Todd Griffin of The Kentucky Retail Federation and Tom Underwood of the National Federation of Independent Business also testified in opposition to the bill.

Griffin said employers search for ways to offset the costs of training unskilled workers when they are forced by the government to hire them at an increased wage level.

The unintended consequences of a wage increase, Griffin said, may mean higher costs to consumers, less employee hours or a loss of jobs.

Shanks said The Kentucky Chamber of Commerce had concerns on the bill as it would decrease the state’s competitiveness with other border states.

The increase could also have a negative effect on small businesses, Shanks said, which was echoed by Underwood.

The bill’s provisions wouldn’t apply to businesses whose annual gross sales are $500,000 or less “to protect the truly small business people who might be adversely affected,” Stumbo said, adding that if he thought the bill would cause Kentuckians to lose their jobs “I wouldn’t be here before you.”

“Studies show that’s just not true. They (opponents) can’t point to any credible data,” Stumbo said

On the back of that point, Rep. Jeff Greer (D-Brandenburg) asked Shanks, Griffin and Underwood if they had brought any data backing up their opposition to the bill, which none produced.

“I guess an answer to my question would be no,” Greer said. “I may be the only small business employer up here. I have a staff of four. I disagree with about everything you say. I was hoping that you could give me some evidence of what you were saying today. I would have given you a more fair shake if you could’ve brought something that backed up what you said.”

The bill passed favorably in committee with Republican Representatives Lynn Bechler, Regina Bunch, Jim DuPlessis, Adam Koenig and James Tipton voting against it.

The increase would save the state an estimated $34 million in Medicaid costs each year, which Stumbo pointed out should raise concern with Kentucky voters. If the Senate doesn’t hear the bill or move to pass it, then it’s not a matter of public policy, but politics,

“If they (Senate Republicans) want to save the taxpayers of Kentucky $34 million this is the way to do it. If you don’t care about that $34 million, then you don’t care about the taxpayers of Kentucky…and leave it to the taxpayers who have to shoulder the burden for providing food and services to these people,” Stumbo said.

“You take the politics out of it, it’s just the right issue. They are turning their backs on $34 million because they don’t want to raise the minimum wage.”

If passed, the state’s minimum wage would increase to $8.20 in August and to $9.15 in July of 2017 and to $10.10 by July 2018.

The increase would not apply to tipped employees making more than $30 monthly in tips; employees of retail stores; service industries jobs like hotels, motels and restaurants with annual gross sales of $500,000 or less; caretakers; babysitters or agricultural workers.