It’s not easy to find folks who make the minimum wage – even in convenience stores, where you might expect to. Estimates of the number of Kentuckians who make $7.25 an hour range from 5- to 12-thousand. Perhaps those relatively low numbers explain why groups like the Kentucky Center for Economic Policy haven’t been able to persuade the General Assembly to raise it since 2009. Dustin Pugel is the group’s policy director. He says they’ll try again next session.
“I know Congress is considering a Raise the Wage Act of 2023. Right now. And so you know, it remains to be seen where that goes. But we do think that we really should have a wage floor through which no one can fall. And right now, that floor is entirely too low.”
In 2007, the General Assembly passed a three-increment increase that raised the minimum wage to $7.25. The final hike took effect July 1st of 2009 – three weeks before Congress matched it. In Frankfort, groups like the Kentucky Chamber of Commerce have lobbied against raising the state’s minimum wage. Charles Aull is the executive director of the chamber’s Center for Policy and Research.
“Our view is that we should continue to align state minimum wage with federal minimum wage laws. That creates a lot more simplicity for employers and also keeps us competitive with a lot of our neighboring states.”
According to the U.S. Department of Labor, some of those neighboring states – Illinois, Missouri, Arkansas, Ohio, Virginia and West Virginia – have higher minimum wages than Kentucky. Tennessee and Indiana have held the line. There’ve been efforts at the state and local level to raise Kentucky’s minimum wage; Pugel says the commonwealth’s two largest cities passed increases.
“But then the retailers of the state sued, essentially saying that localities didn't have the right to do that. And the Supreme Court of Kentucky agreed and so both local minimum wages were struck down and so now we're left with $7.25 an hour, even in high-cost locations like Lexington and Louisville.”
The chamber’s Aull says those who want to raise the minimum wage could hurt employment prospects of some of the people they’re trying to help.
“Inevitably there will be a degree of job loss within that those sectors that tend to pay some of those minimum wage jobs. And so inevitably, those employers would create slightly less of those jobs.”
Aull says the chamber favors tax reform and educational investments to increase the number of jobs and the value of employees. He also warns of a “benefits cliff” for low-wage workers who get a raise, but lose support for childcare and other programs in the process.
Some of Kentucky’s lowest-paid workers are employed at discount stores, like Family Dollar, Dollar Tree and Dollar General. At one of those stores, two employees say a healthy increase in the minimum wage would raise their pay well above the 9 dollars or so many begin with.
“Because by the time you buy a gallon of milk, a loaf of bread and maybe some eggs, you have to work in an hour and a half to pay for it.”
“That would help tremendously because I do my income tax last year. I made an extra three months off though, but I made $12,000 that year. That’s sad. So sad. So yeah, we need help bad.”
Both say they receive Medicaid benefits – the sort of help Aull says they might lose with a big jump in the minimum wage. Pugel says employers who complain of the difficulty of hiring good employees should consider the example of a chain that arrived in Madison County last year.
“Take Buc-ee’s there in Richmond, for example. They they have a really high starting wage, and they were able to fill hundreds of positions within a week. So, you know, I think there's plenty of examples of employers that are willing to pay well, and fill positions quickly.”
Another Buc-ee’s is being built just outside of Bowling Green. Whether other businesses can match their model is an open question. So is whether the General Assembly or Congress will bump up the minimum wage for the first time since 2009 any time soon.
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