A Kentuckian who works a full-time job earning the state’s minimum wage would now be considered to be living in poverty by government standards, according to a report by a Kentucky research group released last month.
Kentucky’s minimum hourly wage has been set at $7.25 – matching the federal minimum wage – for the past 16 years. In an analysis from the Kentucky Center for Economic Policy, the annual earnings of a full-time worker making that rate now fall below the poverty threshold for all household sizes in the Bluegrass State.
The Kentucky Center for Economic Policy (KyPolicy) is an independent, nonpartisan organization that produces and shares research regarding policy issues in the commonwealth. Dustin Pugel, the center’s policy director, said the minimum wage had never been a ‘poverty wage’ until this year.
“$7.25 today means a lot less than it did in 2009,” he said. “In fact, it means about 50% less than it did in 2009, so it doesn't go nearly as far as it used to in purchasing food and housing and gas and all the other things that we need to be able to make ends meet.”
The United States first established a federal minimum wage in 1938. In a message to Congress, President Franklin D. Roosevelt supported the creation of a federal wage floor arguing American workers deserved “a fair day’s pay for a fair day’s work.” But, as Pugel points out, the minimum wage has degraded in purchasing power over the years since it was last raised during former President Barack Obama’s first term.
Pugel said the minimum wage is so low that employers can’t find workers willing to accept the low pay. According to the Bureau of Labor Statistics, Kentucky has 1.1 million hourly workers – most of which are getting paid above minimum wage. However, the policy director said there’s still a need for wages to grow.
“Wages, particularly wages at the bottom, have crept up a little bit, but it's still below what we think would be a more sufficient minimum wage,” he said.
Other states have already taken steps to go beyond the federal minimum wage, and Pugel thinks Kentucky should too. In addition to raising the state’s wage floor, Pugel said allowing local governments to set their own minimum wage could further serve Kentuckians.
“There's a fundamental belief in our country that, if you're putting in your labor, you should be adequately compensated for that. And, unfortunately, what we've seen is that the minimum wage has not been able to keep up with that, because our decision makers have chosen not to increase it.”
One lawmaker in Kentucky’s General Assembly has proposed a bill every legislative session since 2017 to raise the state’s minimum wage – but to no success.
Democratic Sen. Reginald Thomas’s most recent proposal would’ve incrementally raised hourly wages from $7.25 to $15 an hour over a four-year period. The bill would’ve also allowed local governments to set their own minimum wage, which the Kentucky Supreme Court previously ruled goes against state statues. Thomas said the Commonwealth is overdue for a change.
“We're talking about working people, and they deserve a chance,” the Senate minority caucus chair said. “And for Kentucky – now for 16 years – to have not increased [the] minimum wage, it's just shameful.”
Thomas said one of the main critiques he hears from his colleagues in Frankfort is that wages should be set by the market and not the government. Thomas argues that setting a legal minimum wage has historically been about protecting the rights and wellbeing of workers.
“It was apparent during the time of [the] Great Depression that people who want to work could work but not receive wages that would allow them to get out of abject poverty,” he said. “[President] Roosevelt recognized that there had to be some kind of wage standard that would allow people to at least be able to work and make a decent living.”
Kentucky is one of 22 states that have not raised their minimum wage above the federally set rate. Several states in the region have increased the hourly wage floor above the federal level including states like Arkansas ($11 per hour), Missouri ($13.75), Illinois ($15) and West Virginia ($8.75).
