Posts Tagged ‘minimum wage’

More Questions about the Minimim Wage

Friday, February 21st, 2014

Here’s a follow-up to our recent Kentucky Tonight discussion about raising the minimum wage.

As you know, President Obama and many Congressional Democrats want to increase the current minimum wage from $7.25 to $10.10 per hour. In Kentucky, House Speaker Greg Stumbo (D-Prestonsburg) has proposed a similar increase over three years with his House Bill 1.

The nonpartisan Congressional Budget Office, whose views influence legislation being considered by Congress, delivered a mixed conclusion on how raising the minimum wage would affect incomes, employment, and the federal budget. According to a New York Times story on the report, an increase could reduce total employment by 500,000 workers in 2016, but it would move 900,000 families out of poverty. The CBO report also found that 16.5 million workers would get a raise if Congress passes the minimum wage bill.

I asked two panelists from the Kentucky Tonight program on the minimum wage to weigh in on the CBO report. Here’s the reply from Tod Griffin, president of the Kentucky Retail Federation:

Tuesday’s CBO report on the effects of an increase in the minimum wage to $10.10 per hour indicates a loss of up to 1 million jobs as labor costs to employers becomes too expensive.

When the government forces artificial wage inflation, employers have no choice but to reduce the size of the workforce in order to make payroll. Kentucky’s small business owners simply cannot absorb a 39 percent increase in the cost of labor without serious consequences.

Kentucky’s unemployment rate still sits at 8 percent with some rural counties recording unemployment rates above 15 percent. In a February Gallup Poll, nearly one in four Americans mentioned jobs and unemployment as the most important problem facing the country. The anxiety about unemployment is clearly on the rise as only 16 percent said they were most worried about jobs in the same poll one month ago.

Clearly, now is not the time for government intervention in the marketplace.

Here’s the response from Anna Baumann, research and policy associate for the Kentucky Center for Economic Policy:

24.5 million low-wage workers would see their earnings go up if the federal minimum wage were increased to $10.10 over the next three years, according to the new analysis from the Congressional Budget Office. The CBO also finds that the increase would lift 900,000 Americans above the poverty line and reduce income inequality without impacting the federal budget.

These 24.5 million workers account for 98 percent of those the CBO estimates would be affected by the increase. The remaining 2 percent represent the 500,000 fewer jobs that the CBO projects will result. The CBO’s estimate assumes larger job losses than the extensive body of research on this question suggests is likely.

Even if that projection proves accurate, the benefits of raising the federal minimum wage from $7.25 to a more decent $10.10 per hour clearly outweigh the costs for the greater good of the vast majority of hard-working, low-wage Americans.

Monday on Kentucky Tonight, we’ll tackle another controversial issue: expanded gambling in the Commonwealth. With the General Assembly now beyond the half-way point of the 2014 session, some think there’s not enough time to pass a bill to put the issue on the November ballot so voters can decide the question. Others think that behind-the-scenes momentum is building for passage of expanded gambling legislation.

As always, let us know what you have to say about the issue this Monday at 8 p.m. on KET.

Minimum Wage Increase Raises Questions

Tuesday, February 11th, 2014

I opened Monday’s Kentucky Tonight discussion on increasing the minimum wage by saying viewers might be disappointed if they tuned in to learn if raising wages kills jobs and causes layoffs.

I said that because The Atlantic recently reported on its website that researchers have been arguing about that question for a century. One of the first major government studies on the matter was conducted in 1915. Reporter Jordan Weissmann says the connection between minimum wage increases and job losses is still murky. When economists study a minimum wage hike, he says they generally find it either creates a small number of job losses or leaves employment untouched.

Kentucky lawmakers are considering an increase to the state’s minimum wage from $7.25 an hour to $10.10 an hour over the course of three years. Proponents of House Bill 1 say the legislation would be a turning point for thousands of workers who are struggling to make ends meet. Opponents argue that raising the wage would kill jobs, cause some businesses to increase the cost of their products, and force others to lay off employees.

Both sides in this current debate brought their arguments – and their studies – to the table last night. Anna Baumann, a research and policy associate with the Kentucky Center for Economic Policy, and Bonifacio Aleman, executive director of Kentucky Jobs with Justice, support the proposal. Stacy Roof, president and CEO of the Kentucky Restaurant Association, and Tod Griffin, president of the Kentucky Retail Federation, oppose HB 1.

Here’s a sample of our conversation.

Click here to watch the full Kentucky Tonight discussion about the minimum wage.

Recapping Our Legislative Preview

Monday, January 6th, 2014

It was a wide-ranging and refreshingly cordial discussion with legislative leaders last night as we previewed the General Assembly session that starts today. You can watch the full program here.

The first bills to come out of the House and Senate illustrate the differences between the two chambers and the parties that control them. House Speaker Greg Stumbo (D-Prestonsburg) has proposed House Bill 1 that would raise the minimum wage in Kentucky from $7.25 to $10.10 per hour over the next three years. He said the issue is whether Kentucky workers are able to make a living wage and support their families rather than just a minimum wage. Senate President Robert Stivers (R-Manchester) said HB-1 is unnecessary, noting that a 2007 bill included an automatic trigger to raise Kentucky’s minimum wage if the federal minimum is increased. Rep. Stumbo said he doesn’t want to wait for Washington politicians to make that decision.

Bill Goodman with Kentucky's legislative leaders on the Kentucky Tonight set.[Photo by Steve Shaffer/KET]

Kentucky’s legislative leaders on the Kentucky Tonight set. From left, Rep. Greg Stumbo, Sen. R. J. Palmer, KET host Bill Goodman, Sen. Robert Stivers, and Rep. Jeff Hoover.
[Photo by Steve Shaffer/KET]

In the other chamber, Senate Bill 1 proposes a constitutional amendment to limit a governor’s ability to enact administrative regulations. Sen. Stivers said this plan isn’t about how Gov. Steve Beshear handled implementation of the Affordable Care Act and expanding Medicaid, but a more general desire to provide a “check and balance” to executive branch authority in the Commonwealth. The Democrats said they’re open to exploring the issue, but Senate Minority Floor Leader R.J. Palmer (D-Winchester) warned about trying to micro-manage the executive branch from the legislature.

Budget Priorities
As for setting a new state budget, House Minority Floor Leader Jeff Hoover (R-Jamestown) said legislators must first look at education and restore the money that’s been cut there in recent years. But Sen. Stivers countered that funding of the state pension obligation should be the top priority, saying it’s time to “fill in that hole that’s been dug over the past 20 to 25 years.” When a caller asked about funds for the state child care program, Rep. Stumbo said he hopes to be able to restore all or part of that money but isn’t certain where to find the dollars to do so.

Expanded Gambling
On the revenue side of the budget, the key point of discussion was expanded gambling. The panel agreed casino gaming could be enacted by statute, but many lawmakers prefer giving citizens the opportunity to vote on the issue. Rep. Stumbo said such a constitutional amendment should contain clear and simple language and not include a specific benefit to the horse industry, an idea that Rep. Hoover also supported. Sen. Stivers said he’s willing to let the legislative process play out, and if lawmakers want to bring a bill to the floor to expand gambling, he would not prevent that from happening – a significant change in position from his predecessor, former State Senate President (now Circuit Judge) David Williams.

Next up is Gov. Beshear’s State of the Commonwealth address, tonight at 7. You can watch live coverage of the speech on KET and online at KET.org/live.


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