Living on $1,000 a month in Lexington
Rodney Lee has bounced from one job to the next, trying to find one that pays enough to cover all his bills.
Lee, who works temporary jobs, said a $.95 increase in the minimum wage — from $7.25 to $8.20 — that takes effect Friday in Fayette County will help improve the lives of hourly workers like him.
“It’s bad enough that you’re working full time but you are still struggling because you just don’t have enough to make ends meet,” Lee said. “You have to go to a food pantry because you don’t have enough for rent and food.”
Beth Freeman, a Michigan native who recently moved to Lexington and is struggling to find work, said even people making $10 an hour don’t make enough to pay rent for Lexington’s cheapest apartments.
“Wages really haven’t kept up with inflation,” Freeman said. “You may have a lot of hours but the dollar doesn’t stretch as far as it used to. Everything has gone up. Even if you’re making $1,000 a month, even the cheapest rent in Lexington for an efficiency is between $450 and $500 a month. Then you have health insurance.”
Lee and Freeman are among the 31,300 people in Fayette County who make less than $10.10 an hour and stand to benefit from the minimum wage increase, according to U.S. Census data. It’s not known how many of those people make the current federal minimum of $7.25 an hour.
Some workers — including an estimated 5,800 in the restaurant business — are exempt from minimum wage requirements under either the local ordinance or state law.
Employee classifications that are exempt include agricultural workers; employees of hotels, motels and restaurants; federal government employees; newspaper carriers; domestic service employees in private homes, including babysitters; employees of retail shops that have an average annual gross of less than $95,000; and religious nonprofits that do not operate more than seven months of the year.
Lexington became the second city in Kentucky to raise its minimum wage when the Urban County Council voted for the increase in November. Next year, Lexington’s minimum wage will increase to $9.15 an hour. By July 1, 2018, the minimum wage will rise to $10.10.
Louisville was the first Kentucky city to boost its minimum wage. The first increase took effect there on July 1, 2015, and a second wage increase to $8.25 takes effect Friday. Louisville’s minimum wage will eventually increase to $9 an hour by 2017.
But a court case could halt the wage increases in Lexington and Louisville.
A group of business and retail associations sued after Louisville’s minimum wage took effect. That case is pending before the state Supreme Court, which is expected to issue a decision in August at the earliest. If the state’s highest court decides local governments do not have the authority to raise the minimum wage, the wage hikes will be rolled back, legal experts have said.
Bob Quick, president and CEO of Commerce Lexington, said this week the business chamber has had a dozen calls from businesses inquiring about the increase.
“We’ve had more questions, more just to get information,” he said. “Most people are resolved to it’s going to happen.”
Many businesses have been confused because of the state Supreme Court case.
“A lot of our calls have been about whether the start date has been pushed back because of the Supreme Court case,” Quick said.
Many in the business community argued that raising Lexington’s minimum wage will drive businesses to surrounding counties. Others argued that entry-level workers will be squeezed out. Those who opposed it said Lexington should wait until the state Supreme Court case is decided.
A year after Jefferson County raised its minimum wage to $7.75 an hour, unemployment in Jefferson County has gone down, according to U.S. Bureau of Labor Statistics. It was 5.2 percent in July 2015. In May it dropped to 4.4 percent. But it’s still too early to tell what the effect has been on the workforce in Louisville, said Jason Bailey, the executive director of the Kentucky Center for Economic Policy, which advocated to increase the minimum wage in Lexington and Louisville.
“It’s too early right now to tell,” Bailey said. “Their unemployment rate continues to go down but that’s only one number. There really hasn’t been any good, thorough studies yet.”
39 cities and counties in the U.S. have raised the minimum wage since 2003. Lexington, Louisville and Birmingham, Ala,. are the only three cities south of the Ohio River to raise the minimum wage.
In Jefferson County, there have been few reported violations since the first increase last summer, said Carolyn Miller-Cooper, the executive director of the Louisville Metro Human Relations Commission. The commission is charged with enforcing Jefferson County’s minimum wage increase.
“We’ve only had two complaints, one was settled between the parties and one is still pending,” Miller-Cooper said.
“Early on we got a few phone calls about its implementation,” Miller-Cooper said. “But since then, we’ve only had two complaints.”
The Lexington Human Rights Commission will investigate minimum wage complaints in Fayette County.
If the commission finds that someone has been paid less than $8.20, the commission can file a civil complaint in court on behalf of the worker or the worker can file a claim in court, said Ray Sexton, the executive director of the commission.
“They will be entitled to full back wages but there is no penalty,” Sexton said. In Louisville, companies that violate the minimum wage ordinance can face fines of a $100 a day.
If a company is headquartered in a different county but has employees that occasionally work in Fayette County, they won’t have to pay people who work in Fayette County $8.20 an hour, Sexton said.
“We deal with the same issue with discrimination complaints,” Sexton said. “If the company is headquartered in a different county, it’s not something that we generally can investigate.”
Angie Dennis, director of staffing for Advanced Lexington, which is part of the Lexington Rescue Mission, said many people who go through Jobs for Life, their five-week job training program, have previously struggled to find jobs that pay more than $10 an hour. Many participants are homeless, some are from sober living facilities and others have felony convictions.
“That’s why so many of them go from job to job because they can’t make enough to pay all their bills,” Dennis said. “You are so stressed out just trying to make it. That’s where they get frustrated because they get behind in their basic necessities.”
Minimum wage questions
People with questions about Lexington’s minimum wage increase can contact the Lexington Human Rights Commission at (859) 252-4931.