The Kentucky Center of Economic Policy, a nonpartisan progressive think tank, joined the debate over a proposed ordinance to increase the minimum wage in Louisville, releasing a study today that says it would benefit a large section of the city with little risk of negative side effects to the economy.
KCEP’s analysis is based on U.S. Census reports and draws on past research of cities and states that have lifted their minimum wage above the federal level. The study estimates that the proposed ordinance would raise the wages of 22 percent of Louisville’s workers, 62,500 of whom currently make less than $10.10 an hour and 24,8000 who make above that amount but whose wages would go up indirectly.
While much of the common criticism against a minimum wage says this mostly affects part-time teenagers just entering the workforce, KCEP found that 92 percent of those affected would be at least 20 years old. To that point, they also found such an increase would affect almost twice as many workers 50 and older as it would teenagers. Full-time workers would make up 63 percent of those seeing their wages increase.
KCEP also found that among those who would see their wages increase, 53 percent are women, 15 percent work in restaurants and food service, 15 percent in retail stores and 10 percent in health services. They estimate that 58 percent of workers in the hotel services industry and 55 percent in the food services industry would benefit from the increase. KCEP also estimates 77 percent of workers with family incomes below the poverty line would see their wages increase, as well as 3,300 veterans, which makes up 11 percent of veterans in the workforce. Approximately 72 percent of affected workers have no child in their household. (Full breakdown of these numbers in the KCEP chart below.)
“The proposed increase would give a much-needed boost to many thousands of low-wage workers whose incomes have been stagnant or declining and are inadequate to provide a decent standard of living,” said Jason Bailey, the director of KCEP who authored the report. “And the increase is supported by an extensive body of research suggesting little to no harm to employment.”
KCEP cited an Economic Policy Institute analysis finding that in order to provide a “secure yet modest” standard of living in Louisville in 2013, parents with two children needed an annual income of $61,630 and a family with one parent and one child needed $42,944, but a full-time minimum wage earner only earns $15,080.
The analysis also cited a number of research studies on past minimum-wages increases in states and cities around the country, finding such measures “have little to no effect on employment.” Three of these studies looked at the laws increasing the minimum wage in San Francisco and Santa Fe, “and all find no statistically significant negative effects on jobs or hours worked, including in low-wage industries like restaurants.”
The proposed ordinance of Councilwoman Attica Scott, D-1, will receive its first committee hearing Tuesday afternoon in the Labor and Economic Development Committee. The ordinance now has eight cosponsors, but still faces an uphill climb among not just the Republican caucus, but skeptical Democrat council members who are hearing concerns from business owners about its possible negative effects and are looking to add exemptions for teenage workers. Greater Louisville Inc. also criticized the proposed increase as a tactic that will decrease job growth and create an environment that is unfriendly to businesses.