The Lexington-Fayette Urban County Council is expected Thursday to consider a measure to raise the minimum wage, pushing further into the simmering national debate over economics, inequality and the role of government.
The council is set to vote on a measure that would raise the minimum wage from $7.25 per hour to $10.10 an hour over three years beginning next July 1.
The proposal is somewhat a compromise in that it does not include hourly workers who receive tips or tie future wage hikes to the Consumer Price Index. Louisville recently raised its minimum wage scale so it climbs to $9 an hour by 2017.
Ninth District council member Jennifer Mossotti told Business Lexington that gridlock at federal and state levels on the minimum wage issue is one reason she proposed the Lexington ordinance. Helping people at the low end of the pay scale is another.
“I think it’s the right thing to do. If you look at the minimum wage, it hasn’t kept up with inflation,” said Mossotti. “To live on $7.25 an hour, which is about $15,000 per year, is a poverty wage.”
Mossotti said with prices increasing for needs like food and rent while wages have stagnated, something needs to be done.
“I feel very strongly about that,” she said.
Bill Farmer, 5th District council member and owner of Farmer’s Jewelry in Lexington, doesn’t think the council should consider such an action.
“If the state or federal governments wanted to do it, I think that’s fine,” said Farmer. “I don’t think it helps the working public the way some of the commentary will lead you to think. Workers from other counties will drive here for these jobs and workers from here who can’t get those jobs will have to drive to other counties to get paid a lower wage.”
Farmer also said raising Lexington’s minimum wage would create a poor dynamic between Fayette County and surrounding counties, threatening cooperation with Fayette’s neighbors.
The Kentucky Retail Federation surveyed its members and found that a minimum wage increase was among the top five concerns of its respondents, according to KRF President Tod Griffin.
“While many are already paying well over the current minimum wage, increasing the entire wage scale would certainly have a financial impact on the business community,” he said.
The Kentucky Center for Economic Policy estimated that hiking the minimum wage in Lexington to $10.10 an hour would directly lift the wages of an estimated 41,000 workers – 31,300 who make less than $10.10 an hour and 9,700 who make slightly above the minimum but who would see wage improvement as the pay scale is adjusted upward. The center said that the workers benefitting most from an increase would be adults, mostly women, and those who are employed full-time.
“Employers save money through reduced employee turnover due to higher wages and many businesses benefit from the extra spending in the local economy by workers who get a raise,” said Jason Bailey, KCEP executive director