When the Lexington-Fayette Urban County Council votes on whether to raise the minimum wage, the decision for council members will go far beyond local monetary policy — they also will be engaging in a key partisan proxy tug-of-war ahead of next year’s national elections.
“It’s a huge inequality,” said 9th District council member Jennifer Mossotti, who proposed the local ordinance, which seeks to raise the minimum wage here to $10.10 per hour over three years. “I wouldn’t have proposed it if I didn’t think it was something we should undertake as a city.”
Mossotti’s ordinance has stirred strong emotions among members of the council, local business owners, organizations aligned with business, as well as those supporting people on the low end of the pay scale. At a recent meeting, the council considered two amendments to the ordinance: One sought to exclude small businesses and was defeated; the other exempted agricultural workers and narrowly passed.
Mossotti said gridlock at the state and federal levels on the issue necessitated action at the local level.
Lexington’s minimum wage vote, however, hardly exists in a vacuum. In fact it follows a wave of similar moves by state and municipal governments across the nation, including Louisville’s, all aimed at raising the lowest allowable wage above the federal minimum of $7.25 per hour, which was set in July 2009. It also follows an executive order by Gov. Steve Beshear last July setting the minimum wage for certain state workers at $10.10.
Bolstered by the Occupy movement and protests by fast-food and low-wage retail workers, the issue has jumped from the back burner to a hotly debated topic among the presidential candidates of both major parties. The eff orts to raise the wage generally have broken down along partisan lines, with Democrats backing it as a boost to the middle class and Republicans deriding it as a jobs-killer and government overreach.
The Kentucky Restaurant Association, whose members employ many low-wage workers, says cities shouldn’t tamper with wage levels. An official noted that Louisville’s law that raised the wage is being challenged.
“KRA is waiting for Kentucky’s Supreme Court to rule on the issue of localities setting their own minimum wage,” said president and CEO Stacy Roof. “Until then, we believe cities are not spending their time or resources wisely by passing ordinances that may not fall within their jurisdiction.”
Local business group Commerce Lexington also is advocating against the local ordinance.
“If this passed, we would have the largest minimum wage in a multistate region,” said Bob Quick, the group’s president and CEO. “That would make it very difficult on our businesses, the majority of which are small.”
Quick says the very low-paid workers that such a raise is meant to help would actually be hurt by a minimum wage hike. Some business owners, he said, would combat rising payrolls by cutting jobs or hours, thus hurting minimum wage workers.
Quick said there are many well-paying jobs in the region that cannot be filled because people lack the necessary skills. He supports improvements in education and job training so workers can move up the pay scale. There may also be a need for more affordable child care and housing for low-paid workers, said Quick.
Commerce Lexington has surveyed its members on various issues including minimum wage but won’t release the results.
“To get our members to respond, we tell them that it is a 100 percent lockdown and that [information] will only guide us internally,” said Quick. “We used to do surveys and nobody filled them out.”
At the first reading of the minimum wage ordinance, the council chamber was filled with opinions from both sides. Vice Mayor Steve Kay referred to numerous studies that he said proved that raising the minimum wage would not have dire consequences.
“Someone has to speak for the people who now with the minimum wage make 60 to 70 percent of what they used to make in real dollars,” said Kay. “These are people trying to keep their lives together. What we’ve done systematically as a state, a country or a locality is to ensure that these people remain in poverty even though they’re working.”
Councilmember Jake Gibbs of the 3rd District projected a graphic on a screen that listed every minimum wage increase since its inception in 1939. The most recent was 2009.
“There has never been a cataclysmic event,” said Gibbs of the various raises in the wage through the years. “I don’t see how this time would be different.”
Business owner Bill Burke told the council that the minimum wage is for minimum skills and that more serious social problems were at work when whole families are left relying on bottom-level employment. Burke said an increase would hurt his business “to the tune of $175,000 over the next 24 months.”
If approved, he said, the alternatives available would be to lay off workers, cease doing business in Lexington or cut employee health care coverage.
“You will see small businesses exit the city and low-skill employees enter the city,” he concluded.
Bill Farmer, 5th District council member, agreed.
“We’ve had specific input tonight from people who say jobs will be lost, businesses will close,” Farmer said. “Those weren’t maybes. That wasn’t a study. That was real life here at that microphone.”