EDITORIAL: There are no winners in minimum wage battle
Jan 28, 2014 | 3879 views | 0 0 comments | 277 277 recommendations | email to a friend | print
Published in the Kentucky Standard

Raising Kentucky’s minimum wage has become a top priority for Speaker Greg Stumbo as he has included the increase in House Bill 1.

If the bill passes both the House and Senate, it would be the first minimum wage increase in five years for many Kentuckians. The proposed measure would feature a three year staggered increase to get from the current wage of $7.25 per hour to $10.10 per hour.

If Stumbo succeeds in getting the minimum wage raised, Kentucky will join 21 other states that have a minimum wage higher than the federal rate of $7.25 per hour.

Of the remaining states, 20, including Kentucky, have the same rate as the federal rate, four have lower than the federal minimum wage rate and five have no minimum wage state laws at all.

As of 2013, Washington State has the highest minimum wage of $9.32 per hour, and the lowest state rate is $5.15 per hour in Georgia and Wyoming.

So if the minimum wage rate increase does go into effect, Kentucky will move toward the top of the list over the next three years at $10.10 per hour.

While everyone agrees that many low-wage workers have fallen into poverty and simply can’t support themselves, much less a family, on $7.25 an hour, a minimum wage increase will certainly have a ripple effect on the economy.

Small and large businesses alike will have to absorb the pay increase with either cuts in services, job eliminations, raise product prices or a combination of all three.

Consumers will ultimately have to pay higher prices for goods and services. And guess what? Those minimum wage workers are consumers also so they’ll be paying higher prices as well. It’s just a vicious cycle in which there are no clear winners.

Both the federal and state governments are also to blame for this situation. Over the years, the hourly minimum wage has failed to keep up with the rate of inflation, and many workers have fallen into poverty and have been forced to seek public assistance paid for by tax dollars.

Both the federal and state governments need to devise a plan with gradual increases tied to the rate of inflation instead of large, multiple-year increases, as is being proposed.

It appears that House Bill 1 will see plenty of opposition, and many think the focus should be on job creation. However, the reality is that many of the jobs available now or that would be created are in low-wage industries.

This doesn’t appear to be enough for the families who are now headed by minimum-wage workers after years of high unemployment.There are no real winners if the minimum wage increase passes, only short-term gains and long-term losses.

There has to be a better plan to increase the minimum wage, but it appears at this point no one has the answer.
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