The Minimum Wage Debate
by John Gregory | 02/11/14 12:30 PM
Last night those for and against an increase to the state’s minimum wage debated the issue on Kentucky Tonight. House Bill 1, sponsored by Speaker Greg Stumbo (D-Prestonsburg), would raise the minimum from the current $7.25 an hour to $10.10 per hour over the next three years.
Anna Baumann, research and policy associate with the Kentucky Center for Economic Policy, said such an increase would improve the living standards for one in four Kentuckians; one in five children would have at least one parent who would get a raise under the measure.
Bonifacio Aleman, executive director of Kentucky Jobs with Justice, gave an example of how one Kentuckian, a woman named Lynn, would benefit from the proposal. Lynn makes minimum wage working at a gas station. As Aleman explained, Lynn has five children but can only afford to raise two of them, so the other three have to live with relatives. By making $10.10 per hour, Aleman said Lynn would be able to reunite her family, and not have to choose between buying food or paying her utility bills.
A recent Bluegrass Poll showed Kentuckians overwhelmingly favor an increase to the minimum wage: 61 percent support the idea, 32 percent oppose it, and 7 percent are undecided. The results show Democrats and unregistered individuals strongly support an increase. Slightly more Republicans oppose the idea than favor it, 48 percent to 45 percent. (The margin of error for the poll is +/- 3 percent.)
Stacy Roof, president and CEO of the Kentucky Restaurant Association, discounted the poll results saying everyone wants to make more money. The problem, she said, is how business owners will pay those increased wages. She explained that food service profit margins are so slim that restaurants would either hire fewer employees or raise prices in order to pay the increased minimum wage.
(A separate proposal, House Bill 191 would increase the minimum wage paid to tipped workers, such as restaurant waiters and waitresses.)
Business owners also worry about their competitiveness in the global economy. Tod Griffin, president of the Kentucky Retail Federation, said the higher domestic wages go, the harder it is for American companies to compete against low-wage workers in other countries. Citing self-service grocery check-outs, Griffin said some businesses may also turn to technology to replace workers they can no longer afford to pay.
Click here to watch the full Kentucky Tonight discussion about the minimum wage.
After a lengthy debate last Thursday, HB 1 passed the full House on a 54-44 vote. Legislators added an amendment that would exempt small businesses with annual gross receipts of less than $500,000 from the measure. The House also passed HB 191 last week. Both bills now head to the Senate.