If Congress, state won’t raise minimum wage, Lexington should

March 29, 2015

The minimum wage has a big impact on low-wage workers, many of whom must rely on public assistance to make ends meet, as well as the overall economy, which is driven largely by consumer spending.

The $7.25 federal minimum wage hasn’t been raised since 2009. Its value adjusted for inflation has lost more than 25 percent since its peak in 1968.

Congressional Republicans have refused to raise the federal minimum wage. But many states and cities have raised theirs, realizing its importance to both low-wage workers and local economies.

The Democrat-led Kentucky House recently approved a state minimum-wage increase that was rejected by the Republican-led Senate. Louisville’s Metro Council in December approved a gradual minimum-wage increase to $9 over three years, which is being challenged in court.

Urban County Council member Jennifer Mossotti has proposed gradually raising Lexington’s minimum wage to $10.10 an hour by July 2017 and tying future increases to the consumer price index. The proposal also would gradually raise the $2.13 minimum wage for tipped workers, who haven’t seen an increase since 1991, to $3.09 over three years.

Council members are unlikely to consider the issue before June. But when they do, Jason Bailey, director of the Kentucky Center for Economic Policy, has put together a good report about the low-wage Lexington workers who would be affected.

Among the highlights: An increase would directly lift wages for about 20 percent of Lexington workers, 90 percent of whom are older than 20 and 30 percent of whom are 35 and older. Fifty-seven percent are women, 54 percent work full-time and 26 percent have children at home. Read the full report at: Kypolicy.org.

Businesses usually oppose minimum-wage increases — if not the very idea of a minimum wage — saying that increasing labor costs forces them to put people out of work and raise prices. Studies have generally shown those effects to be negligible, and the economic impact to be positive.

A minimum-wage increase is long overdue. If federal and state officials won’t do it, Lexington should join other cities and states that are.

A new voice in Kentucky public policy debates

January 11, 2011

A new think tank has been created to study Kentucky issues and analyze the public policies being developed to address them.

The Kentucky Center for Economic Policy is a project of the Berea-based Mountain Association for Community Economic Development, which has a long track record of producing quality research on issues affecting Eastern Kentucky and Central Appalachia. The center’s Web site is at: www.kypolicy.org.

The center’s first report looks at how $3.4 billion in federal stimulus money shored up Kentucky’s budget — and how the state will be affected now that stimulus spending is coming to an end.

“Kentucky relied heavily on Recovery Act dollars to plug holes in the 2009-2010 state budget and to craft a balanced budget in 2011-2012,” the center’s director, Jason Bailey, said in a news release about the report.  “Those funds dry up this year, however, at a time when the economy remains in a deep hole.”

Click here to download the report. You can sign up to receive future updates at the Center’s Web site.

Expect the Kentucky Center for Economic Policy to provide some progressive balance to the conservative Bluegrass Institute for Public Policy Solutions, based in Bowling Green.