Sen. Reginald Thomas, D-Lexington, will attempt once again to increase the minimum wage paid to workers across the state through a bill he says he’ll file before the 2021 General Assembly convenes in January.
Kentucky’s minimum hourly wage is $7.25 per hour, a level held for the past 12 years and equal to the federal minimum wage. Thomas proposes increasing it to $15 per hour by 2026 through a series of five staggered annual increases. Similar bills he has sponsored during the each of the past three years failed to make it out of committee.
“Right now, times are hard,” Thomas told reporters when speaking about his planned bill. “The global pandemic has brought to light many of the struggles working Kentuckians deal with every day. As the market rebounds and people return to work, they need a wage that is livable to support themselves and their families.”
What Thomas failed to also mention is the significant impact the ongoing pandemic has had on struggling businesses across the state.
Too many small business owners are struggling to hang on, desperately hoping for light at the end of what has been a long, dark tunnel.
As the nation claws and crawls its way out of the pandemic once a proven vaccine is made readily available and becomes as widespread as the virus itself, the worst possible thing any legislative body can do is impede the recovery of businesses which make up the marketplace.
Mandated increases in minimum wages will put some businesses and industries into the position of having to decrease employment to offset growing payroll expense.
Others will attempt to pass along the increased labor expense to their customers, some of whom will buy less frequently and others not at all
Both scenarios are harmful to workers and the employers who pay them.
No one should argue against the importance of Kentucky workers receiving a livable working wage. But according to the Bureau of Labor Statistics report released in September by the U.S. Department of Labor, few of Kentucky’s workers actually are paid at the minimum wage level.
The average weekly wage listed in the statistics for Kentucky during the March 2019 to March 2020 period was $943, well above the minimum weekly wage of $290 and above the weekly living wage of $927.60 for an adult with a child at home. The statistics lists Hardin County to have an average weekly wage of $844.
Of Kentucky’s small retail and service businesses who do have lower than average wage levels, it’s because their profit margins aren’t large, not because they want their employees pay to be low. Hitting these companies with higher wage mandates isn’t going to improve their operating margins or their ability to pay more. Only the opposite will occur.
The best thing Thomas and his fellow Kentucky legislators could do for workers on the low end of the pay scale is make Kentucky a more attractive and lucrative environment for new and expanding business.
Wages naturally increase where expanding employment opportunity and competition for skilled workmanship and ability meet in the market.
Given the uncertainty Kentuckians are facing at the present time, artificially propping up pay with a mandated increase in the minimum wage in 2021 would be ill-timed and unwise.
This editorial represents a consensus of The News-Enterprise editorial board.