Herald-Leader Editorial

Ky. legislature should increase minimum wage

January 12, 2014 

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If there is one point of unquestioned agreement between liberals and conservatives, it is the value of work.

Few argue with the contention that earning wages by doing a job is the surest path to economic and social stability.

As a nation, we value this so much that we have a national holiday, Labor Day, to celebrate work, and we have a federal tax policy — the Earned Income Tax Credit — to reward workers even when they make poverty-level wages.

Why not honor work with better wages?

That's the point of raising the minimum wage.

House Speaker Greg Stumbo, D-Prestonsburg, has proposed an increase in Kentucky's minimum wage, at $7.25 since 2009, to $10.10 over three years. That would mean that a person working full-time, year-round would earn $20,200 before taxes and deductions.

It's not a luxurious living, but it is an affirmation of the value of labor and laborers that the Kentucky General Assembly should adopt.

It's also a measure that is likely to have broader benefits for Kentucky.

Higher wages for low-income workers will be spent on food, utilities, automobiles, clothing, housing and other essentials, pumping up sales and sales taxes. Higher wages would also mean workers are less dependent on the taxpayer-funded safety net that keeps so many Kentuckians afloat.

Opponents of raising the minimum wage generally rely on two arguments: It will cause employers to cut jobs because of increased costs and it will have little impact on struggling families because most minimum-wage workers are middle-class teenagers earning spending money.

There is virtually no research to support the first contention, despite hundreds of studies since the first federal minimum wage (25 cents an hour) went into effect in 1938.

Some studies show slight job losses; some show gains as more money moves into the economy with wage increases. There is virtually no evidence of significant or enduring negative impact on employment in the 75 years since minimum wages have been in effect in this country.

University of Kentucky economics professor James Ziliak said that with a staggered rollout over three years, as Stumbo proposes, minimum wage hikes have not historically disrupted job markets. Considering that the last wage hike was in 2009, by the time this increase is complete, the economy will have had eight years to absorb the change.

As for those who earn the minimum wage, an analysis of the 336,000 Kentuckians in that category found that 89 percent are age 20 or older; 27 percent are parents.

Slightly more than 16 percent live in families with incomes of $75,000 a year or more, while 55.4 percent have family incomes of less than $40,000 a year,

Ziliak, who heads UK's Center for Poverty Research, said that in the past decade, "an increasing number of families are headed by minimum-wage workers."

It is also worth mentioning that low-income workers spend money carefully.

The Bureau of Labor Statistics reports that families receiving public assistance spend about 75 percent of their income on essentials: food, housing and transportation. And they spend more of their food dollars on meals eaten at home than do wealthier families.

Politicians talk about the importance of creating more high-wage jobs in Kentucky. But the reality right now is that the only jobs for many hardworking Kentuckians are in low-wage industries.

It's right to honor their work with a higher minimum wage.

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