Greg Stumbo says it’s time to raise Kentucky’s minimum wage. Jeff Greer says if it happens, he’ll go out of business.
Stumbo, Democratic Speaker of the House, wants to raise Kentucky’s minimum wage in equal increments of 95 cents over three years to $10.10. Presently, the minimum wage is $7.25 and tied to the federal minimum wage, which Democrats in Washington, led by President Barack Obama, also want to raise to $10.10 an hour.
“Poll after poll shows us that support is overwhelming among Democrats, Republicans and independents all across the country,” Stumbo told the House Labor and Industry Committee on Thursday. He said 21 other states presently have minimum wages higher than the federal level.
“We can’t wait for the federal government to act,” Stumbo said. “Kentucky workers deserve help now.” A minimum wage earner working 40 hours a week for 52 weeks a year makes $15,080 annually, which would rise to $16,209 under the first increase of 95 cents. At $10.10 an hour, a worker would make $21,008 a year.
The issue generally divides Democrats and Republicans and that’s likely to be the case in the 2014 General Assembly. Republicans on the committee expressed the greatest doubts about Stumbo’s measure and most give the measure little chance of passing the Republican-controlled state Senate.
The issue has also been raised by presumed Democratic nominee for the U.S. Senate, Alison Lundergan Grimes, who criticizes incumbent Republican Sen. Mitch McConnell for past votes against raising the federal minimum wage. Stumbo is a political ally of Grimes and her father, Jerry Lundergan.
Stumbo told reporters after the meeting the Senate should pass the bill and might if “they just look at the issue and don’t look at who is sponsoring it.”
The Speaker said the measure would benefit around 391,000 Kentuckians who presently make less than $10.10 an hour. It would not affect businesses which have gross sales of $190,000 or less, some agriculture workers or tipped employees (although another bill in the House would raise the wage for tipped employees).
Those are people who “are not able to come to Frankfort today to lobby you like some who stand in opposition.”
Neither Stumbo nor the committee had to wait long to hear from opponents.
Todd Griffin, president of the Kentucky Retail Federation, said passage of the measure would “only increase the headwinds for Kentucky small businesses” which he said operate on profit margins as small as 1 percent.
Bob Patterson of Patterson Company, CPAs, which does most of its accounting work for companies in the hospitality and food industries, said a review of employee wages at their clients’ companies show only “a very small percentage of employees” make less than $9.93 an hour but Stumbo’s proposed increase “would easily close many cash-strapped restaurants.”
Lee Greer of the Greer Company, which owns restaurants, hotels and development properties in multiple states and had $5.1 million in profits before taxes last year, said his company would be bankrupted by the increase in Kentucky. He said the bill would cost his company $2.6 million.
“We’ll be out of business and 6,100 Americans will lose their jobs,” Greer said.
Afterward, Stumbo returned to the table and told the committee critics of the measure had made his case for him and said if the bill passes he’ll be happy to offer Greer $2.5 million for his company.
He said the bill would increase the bottom wage by 95 cents a year for three years and companies can easily plan for and adjust to “what they know about” while it is “unanticipated” costs and expenses which threaten most businesses.
Republican committee members Lynn Bechler and Tim Couch expressed concerns about an increase’s impact on unemployment and jobs. Couch operates a grocery store with 19 employees, he said. But if the wage goes to $10.10 an hour, he’ll have to reduce that number to 15.
In the end the measure passed the committee with only the no vote by Rep. Adam Koenig, R-Erlanger. Couch had left the room by the time the vote was taken and Bechler and Regina Bunche, R-Williamsburg, passed.
The committee also passed a companion measure sponsored by Rep. Will Coursey, D-Symsonia, which would require tipped employees to be paid 70 percent of the minimum wage.
RONNIE ELLIS writes for CNHI News Service and is based in Frankfort. Reach him at firstname.lastname@example.org. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.