Minimum wage bill clears Ky. House

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Associated Press

Posted on February 7, 2014 at 9:01 AM

FRANKFORT, Ky. (AP) — Kentucky's minimum wage would rise for the first time since 2009 under a bill that cleared a divided state House of Representatives on Thursday evening. The partisan debate focused on the struggles of the poor and the potential hardships the higher wage could pose for businesses, schools and local governments.

Under the measure, the minimum wage would gradually increase from the current $7.25 an hour to $10.10 per hour in July 2016. There would be 95 cent increases in three phases.

The bill cleared the House on a 54-44 vote after a bitingly partisan debate that lasted more than two and a half hours.

"When you get up and go to work every day, and you work hard, you ought to be paid something you can live on," said House Speaker Greg Stumbo, who has made raising the minimum wage issue his top legislative priority this session.

The bill was amended Thursday to exempt businesses with annual gross receipts of under $500,000.

The measure now goes to the Republican-led Senate, where it could face an uphill struggle. The bill also includes provisions to deal with pay-equity problems.

Nearly 400,000 Kentuckians work for the minimum wage, and almost 70 percent of them are women, Stumbo said.

Overall, about a third of them work full time, he said, and an estimated one in four Kentucky children live in homes where at least one parent earns the minimum wage.

People working full time for $7.25 an hour make barely more than $15,000 a year before taxes, Stumbo said.

The state's minimum wage last went up in 2009 — stemming from 2007 legislation approved by the General Assembly that staggered those increases over three years.

Opponents of the latest proposal said the higher wage would force some employers to cut jobs. They said it would result in higher retail prices as stores pass along increased labor costs to consumers. And it would increase wage costs for school districts and local governments struggling with tight budgets, he said.

"It is not that we don't want to do this," said Rep. Bam Carney, R-Campbellsville. "People are going to say, 'They don't care about folks.' That's the furthest thing from the truth. And we all know it in this room, but that's the political thing to say. We would all love to do this. ... The reality is, this is bad for business."

House GOP Floor Leader Jeff Hoover said the higher minimum wage would add $40.4 million in costs to Kentucky school districts and $42 million for city and county governments in the next decade. It would amount to an unfunded mandate, he said.

Hoover, who voted for the minimum wage hike in 2007, said circumstances are different now, with an economy still struggling to recover from the recession and with stubbornly high unemployment rates.

He said a review of a higher minimum wage by legislative staff economists indicated it would cost nearly 14,000 people their jobs. It also would hurt the competitiveness of Kentucky businesses situated near states that would have a lower wage, he said.

Republican Rep. Tim Couch said the higher minimum wage would be a hardship for businesses in his eastern Kentucky district, where the coal economy is suffering.

"Right now is not the time," he said.

Stumbo, D-Prestonsburg, said the higher wage would stimulate the state's economy.

"Every dollar they get, they spend back in the economy," he said.

Rep. Jim Wayne, D-Louisville, said the proposal recognizes the struggles of the poor, and their desire to give their children opportunities.

"If your conscience is so blinded ... that you can't see the wisdom of doing this simple bill, voting for it, then God help us," he said. "This is for people who are struggling every day just to stay alive."

Voting for the bill were 50 Democrats and four Republicans. Forty-two Republicans and two Democrats voted against it. Two other Democrats did not vote.

The House later passed a related bill that would raise the minimum wage for employees such as waiters and waitresses receiving tips.

That measure would raise the current $2.13 minimum wage for tipped employees to $3 per hour this July, and by 95 cents each following year until it reaches 70 percent of the regular minimum wage.

The House sent that bill to the Senate on a 57-40 vote.

___

The legislation is House Bill 1. The legislation dealing with tipped employees is House Bill 191.

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