Lexington Mayor Jim Gray declined to say Wednesday if he would sign an ordinance raising the minimum wage in Fayette County to $10.10 an hour over the next three years.
The Urban County Council is expected to take a final vote on the proposal Thursday night. A previous vote to put the proposal on the council’s budget passed narrowly 8-6.
“Congress should have increased the minimum wage several years ago after the economy rebounded,” Gray said. “Since Congress has failed to do their job, the council has been searching for a local solution. But with a local approach there is always a risk of losing businesses, losing jobs and losing competitiveness. I am still concerned about that.”
When asked if he would veto the ordinance if it passed, Gray would not comment. Gray said it was premature to discuss next steps until the council voted.
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“I am still listening to the different points of view and evaluating the issues and the consequences,” Gray said.
If Gray vetoes the ordinance, the council would need nine votes to override his veto.
Councilwoman Jennifer Mossotti —who has pushed to raise the minimum wage— said Wednesday she thinks there are enough votes for the ordinance to pass. If it does, Lexington will become the second city in Kentucky to pass a minimum wage ordinance. Louisville was the first.
Under the ordinance, the minimum wage would increase from the current federal minimum of $7.25 an hour to $8.20 an hour next July 1; $9.15 an hour on July 1, 2017; and $10.10 an hour on July 1, 2018.
“I am cautiously optimistic,” Mossotti said. “But things can change pretty quickly. But I have not heard that anyone will change their vote. I’m anxious to get this done. We have been talking about this since March. I think it’s the right thing to do. Everyone I talk to talks about the stagnation in wages. We haven’t kept up with inflation. Go to the grocery store. The prices speak for themselves.”
Councilman Richard Moloney was not at the Oct. 27 work session when the council voted 8-6 to put the ordinance on the council’s agenda. Moloney has not said how he will vote Thursday. But Moloney has voted against previous amendments to the ordinance that exempted small businesses.
The council has debated the issue since March and has held several public meetings. The original proposal would have tied future raises to the consumer price index after three years and also included a raise for tipped employees. To secure the needed eight votes, Mossotti agreed to take out both provisions.
“Was I happy about that?” Mossotti said. “No. But we needed to get to a compromise. If there is no deliberation, there is no collaboration.”
Bob Quick, CEO and president of Commerce Lexington, the city’s chamber of commerce, said he hoped the council would table the ordinance until a legal challenge to Louisville’s ordinance has been heard by the state Supreme Court. A group of business organizations filed a lawsuit after Louisville passed its minimum wage increase, which would raise the minimum wage to $9 over three years. At issue in that lawsuit is whether local governments have the authority to raise the minimum wage.
A spokeswoman for the Kentucky Retail Federation — one of the organizations involved in the Louisville lawsuit — said it’s unlikely the retail federation would file a lawsuit against Lexington if the ordinance passes. Instead, the federation will wait to see what happens at the state Supreme Court.
The federation also sent letters to council members asking that Lexington wait until the Louisville case is resolved. “ We believe cities do not have the authority to enact their own minimum wage,” said Sarah Rowlette, director of communications for the federation.
If the city won’t wait until the Louisville case is decided, it should convene more people and get more input, Quick said. He said he doesn’t think the council has received all the information it needs.
“This is a complicated issue,” Quick said. “Everybody is trying to do the right thing. The right thing is for everyone to sit down together and to work out what the ramifications are.”
Quick said Commerce Lexington is worried costs will be passed on to consumers or jobs could be cut. Some people could lose federal or state benefits if their wages increase, he said.
“When you increase wages by 40 percent, you are going to have to make cuts or pass along increases in costs to customers,” Quick said.
Quick said research on what happens after a city or a county raises the minimum wage is inconclusive. Quick said he is also concerned there is no mechanism in the ordinance to review the effects of raising the minimum wage in a year or two.
“How do we know a year from now or two years from now if this is helping the individuals we are trying to help,” Quick said.
Malcolm Ratchford, executive director of the Community Action Council, which serves low income people in Central Kentucky, said fighting poverty takes a multi-pronged approach but raising the minimum wage is key.
“In order to get out of poverty, you have to make more money,” Ratchford said.
But the current minimum wage does not support the cost of living in Lexington, Ratchford said.
“We have folks that can not afford fair market rent in Fayette County on minimum wage or even on $8 or $9 an hour,” Ratchford said. “Not only that, but they can’t pay rent plus utilities. Many of our low-income families spend up to 30 percent of their income on utilities.”
Ratchford said many people think the minimum wage is for high school and college students who are still living with their parents. Too many adults in Fayette County have to work several minimum wage jobs to make enough to pay all of their bills, he said.
“They are trying to piece together a living,” Ratchford said.