National Opinions

Raising minimum wage hurts everyone

Robert L. Quick is president and CEO for Commerce Lexington.
Robert L. Quick is president and CEO for Commerce Lexington.

Let's start where we can agree: We share a common goal to create economic opportunity for all of Lexington, from low-income workers to entrepreneurs to our largest employers.

But, by their very nature, complex problems don't have simple solutions.

The current proposal to raise Lexington's minimum wage to $10.10 would give Lexington a higher minimum wage than any of our bordering states or competitor cities, including Louisville, which recently passed an increase to $9 per hour.

Although a wage increase of almost 40 percent might seem like good news, the negative consequences include competitive disadvantages for local businesses; an estimated 2,200 jobs lost, particularly among the lowest-skilled employees; reduced work hours; and increased prices for goods and services, which will disproportionately impact low-income families.

Although a number of workers may benefit, there is no greater social ill for a family than the loss of a job. The loss of 2,200 jobs is the equivalent of losing a top-ten employer in Lexington.

Job loss findings have been supported by the most recent major study of the federal minimum wage, issued by the non-partisan Congressional Budget Office, which was validated by the chair of the Federal Reserve in testimony before Congress.

Commerce Lexington Inc. has a longstanding position of opposing local wage mandates that exceed state or federal guidelines because of the competitive disadvantage it would place on Lexington's economy and ability to create jobs. With relatively little existing research on local minimum wages, even some poverty experts are wary of this approach.

The estimated pricetag of $92 million annually for the $10.10 proposed wage will impact businesses and some workers negatively. And, it isn't Wall Street or rich stockholders who would foot the bill. The majority of companies are small businesses and many of them are locally owned, while others are nonprofits that already operate on shoestring budgets.

Urban County Council members have taken a positive first step by listening to business concerns and removing the particularly troubling provisions to tie future wage increases to the Consumer Price Index, (CPI) because of the lack of wage certainty this creates, especially during recessionary time periods.

However, other questions remain regarding the city's legal authority to enact local wage mandates, enforcement capabilities and application to businesses operating in multiple counties.

The Kentucky Supreme Court is considering the lawsuit filed against the city of Louisville for its ordinance. We urge council members to table a vote on a Lexington ordinance until this case is settled and legal questions are answered.

In the meantime, let's take this opportunity to gather community stakeholders around a complicated issue for more in-depth discussion of all policies to determine the best path forward to advance workers out of poverty.

Every day employers have skilled, high-wage jobs that go unfilled because we don't have the qualified workers. Rather than artificially inflating wages that lead to job loss, let's find ways to lift up low-income workers into careers with wages that will allow them to become homeowners, invest in post-secondary education and save for retirement.

Commerce Lexington recommends a focused study that would better clarify who would be impacted and how, and examining more effective solutions to poverty reduction, such as local payroll-tax abatements for lower-income workers as well as targeted education and training efforts.

Several cities offer training for low-income workers that leads to community college or university credentials for jobs in growing sectors. These efforts align support services to aid with education navigation, housing, child-care, transportation and other barriers to employment to help workers achieve maximum wages.

Commerce Lexington is committed to continuing to work with council members to find alternative policy solutions that will help lift families out of poverty without hurting local job providers and placing Lexington at a competitive disadvantage.