Would Increasing the Minimum Wage Hurt or Benefit Kentuckians?

Tuesday, August 19th, 2014

Legislation to boost the minimum wage has been proposed in Frankfort and Washington, and the issue is part of the discussion in this year’s U.S. Senate race between Alison Lundergan Grimes and Sen. Mitch McConnell.

The panel on Monday’s Kentucky Tonight joined the debate on the minimum wage as they explored how an increase could affect workers and business-owners in the commonwealth. The guests were Jason Bailey, director of the Kentucky Center for Economic Policy; Malcolm Robinson, economics professor at Thomas More College; and Brian Strow, economics professor at Western Kentucky University; and Jim Waters, president of the Bluegrass Institute for Public Policy Solutions.

According to the National Conference of State Legislatures, Kentucky’s $7.25 per hour minimum wage is equal to or lower than the wage rates for our neighboring states. Indiana and Virginia are also at $7.25. West Virginia is at that rate as well, but its minimum is set to increase to $8 per hour at the end of the year. In contrast, Illinois has a minimum of $8.25 per hour, while Tennessee has no minimum wage.

In the 2014 legislative session, Kentucky House Democrats proposed increasing the state minimum to $10.10 per hour over a three-year period. House Bill 1 passed the lower chamber of the General Assembly 54-44, but died in the Republican-controlled Senate.

The Kentucky proposal mirrors legislation promoted by Congressional Democrats to increase the federal minimum wage in the same fashion.

Here’s how the Kentucky Tonight guests viewed the potential benefits to low-wage workers and the possible impacts to unemployment in the state.

Jason Bailey says the income disparity between minimum-wage workers and corporate executives is not only unfair, but also incurs other costs to society: More people require public assistance, fewer people can afford educational training that would help them secure better jobs, and there is less consumer spending rippling through the economy. The result, Bailey contends, is lower financial mobility for those at the bottom of the economic ladder.

Kentucky House Minority Leader Jeff Hoover (R-Jamestown) has argued that increasing the state minimum to $10.10 per hour would put the commonwealth at a distinct competitive disadvantage with surrounding states. Economist Brian Strow agrees, saying Kentucky would be the poster child for a state were a minimum wage increase would do the most damage because of our already high unemployment rate and low median incomes.

Watch the full Kentucky Tonight discussion.

This post was written by KET public affairs reporter John Gregory.

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