Metro Councilwoman Attica Scott’s proposed ordinance to raise the minimum wage in Jefferson County received its first committee hearing on Tuesday, bringing with it a fuller debate from its supporters and opponents.
That morning, Kentucky Jobs With Justice hosted a discussion of the minimum wage at Old Louisville coffee shop Smokey’s Bean, featuring Scott and U.S. Rep. John Yarmuth, D-3rd. Citing gridlock in Congress and Frankfort stalling legislation to raise the minimum wage to $10.10 an hour, Yarmuth argued the best option left to immediately help workers making a sub-living wage in Louisville is action at the council level. Responding to skepticism from some council members — including Democrats — that paying more than $7.25 an hour will hurt businesses, Yarmuth said taxpayers already are subsidizing low-wage businesses because workers must rely on government assistance to survive.
“If your business model requires you to pay people less than a living wage, then you shouldn’t be in business,” said Yarmuth.
At Metro Council’s Labor and Economic Development Committee meeting that afternoon, Kentucky Center for Economic Policy director Jason Bailey discussed the nonprofit’s new analysis predicting Scott’s proposed ordinance would lift the wages of 62,500 workers in Jefferson County; he also cited several studies showing other cities and states have raised their minimum wage and not seen any significant decrease in employment.
Council President Jim King, D-10th, asked Bailey if he thinks council members should just disregard “all the businesses that have been contacting us that say they will move or that they would be willing to pack up their business if they pay $10.10 an hour.” In response, Bailey said his analysis only looked at the aggregate impact of an increase — increased worker benefits and little risk of job loss — though “that’s not to say you couldn’t find any individual instances. I wouldn’t suggest that you couldn’t, but it would need to be weighed against the number of people who would benefit.”
Councilman Ken Fleming, R-7th, took issue with Bailey’s data from the federal government, adding that he “could go through a litany of reports in D.C. and California that say this would be very hard on the working poor, in terms of losing jobs.”
Councilman Jerry Miller, R-24th, took the criticism of Bailey to another level, saying his analysis should be discounted because “I know George Soros (billionaire Democratic donor) finances this gentleman’s organization.” (KCEP has never received money from Soros, according to Bailey.) Miller said the council should instead invite and listen to the Bluegrass Institute for Public Policy Solutions, a libertarian think tank opposed to a minimum wage increase, adding that “now we’re going to open up two new bridges and make it even easier to ship our jobs to Indiana.”
“We need to talk to small businesses,” said Miller. “We need to talk to people like the guy who makes taco chips here, Packaging Unlimited. These are the people that employ our low-skilled workers … It is very difficult for us to magically create value for our workers, because our education (system) has failed many of our students. We cannot magically overrule supply and demand. We have to make the pie bigger. We have to see how we can get more companies to come to Louisville, not just chase companies off.”
Just as Miller made a point of Bailey not being an economist — he has a degree in public policy and relied on the research of economists — Fleming added that Bailey has never owned a for-profit business. Fleming said businesses would be forced to increase prices, lay off workers or move out of the county, which he says several business owners have told him they would do.
“One of (those business owners) said it’s going to impact up to 96 employees who will have to be laid off,” said Fleming. “That’s less revenue for this government, and more important, it’s going to be tough for them to find a job. Another company says they’re going to have 25 layoffs, because they’re in a very tough competitive market.”
Bailey replied that businesses have other ways to shift with wage increases besides layoffs and relocation, especially in the restaurant and retail industries, which make up most of the low wage pool and whose labor costs make up a much lower percentage of total costs.
“For the industries in which this is concentrated, they’re not competing in a global market, they’re competing in a local market, where they’re all impacted by it,” said Bailey. “In the case of restaurants, in the case of retail, you have a lot of workers with more money in their pockets that are spending it.”
Councilwoman Mary Woolridge, D-3rd, one of eight current sponsors of the proposed ordinance, noted that while the pay of such workers has remained low despite increased costs of living, council members automatically raise their own wages by 2 percent each year in the annual budget.
The Labor and Economic Development Committee will have several more hearings for the bill in the coming weeks, and committee chairman David Tandy, D-4th, says they will include testimony from economists both for and against a minimum wage increase.
Asked about Mayor Greg Fischer’s notable absence from the debate over raising Louisville’s minimum wage, Yarmuth said Fischer “hasn’t been public in that regard yet, but he’s told me (privately) he’s for it. So we’ll see what happens if it moves along in the council.”