Kentucky Democratic Senator Reginald Thomas has attempted to raise the state’s minimum wage for the past four legislative sessions without getting a committee hearing — but he said now might be the right time for his prefiled bill.
BR 91 aims to incrementally raise Kentucky’s minimum wage for small and large employers to $12 per hour and $15 per hour, respectively, defining small employers as those with 25 or fewer employees and large as those with 25 or more. The bill proposes raising the minimum wage to $10 per hour at the time of passage and reaching $12 and $15 per hour by 2026.
The bill request also includes language permitting local governments to exceed the state minimum wage if they see fit, harkening to when Lexington and Louisville were struck down by the Kentucky State Supreme Court after attempting to raise their local minimum wages.
“It’s really kind of immoral in our nation to want people to work and have them work but still live in poverty,” Reginald said of Kentucky’s current minimum wage. “So I’ve been pushing to raise the wage, to give people a liveable wage, so at least they can maintain the dignity of working while not seeking a government handout and at least get out of poverty.”
Kentucky last raised its minimum wage in 2009 to $7.25 per hour, coming out to $15,080 per year at 40 hours a week with no vacation. According to the Assistant Secretary for Planning and Education, the current poverty threshold for an individual in the U.S. is $12,880.
Thomas said raising the minimum wage would address what he considers Kentucky’s “alarmingly low” workforce participation rate of 56.4%, ranking 49th in the nation according to a Sept. 17 state employment report.
This trends with the national worker shortage observed since earlier this summer, which some economists say may not be fully resolved for years. In August, 50% of all small business owners reported job openings they could not fill — surpassing the 48-year historical average of 22% — according to the National Federation of Independent Businesses.
“Everywhere you go in America, the signs you see more than anything else are ‘jobs available,’ ‘help wanted.’ Those kinds of notices are everywhere because we have a shortage of workers in this country,” Thomas said. “Nobody’s going to go work for $7.25 anymore. They’re just not going to do it. As policymakers here in Kentucky, we need to raise the floor so we can attract people back into the workforce and help build and grow our economy.”
But first, Thomas will need to reach a compromise with the opposition, which is why he plans to implement wage increases incrementally and has included language distinguishing between small and large businesses.
“You might have your mom and pop workers who just really can’t afford $15 an hour. That would be onerous on them to maintain,” Thomas said. “But excluding those small employers, the wage rate has to be $15 an hour, and I want to get there as soon as possible.”
Opponents of raising the minimum wage often say doing so would result in job losses to compensate for each employer earning more, and the prices of goods and services would increase significantly. Some researchers say these effects would not be significant enough to warrant concern.
Kate Shanks, senior vice president of public affairs with the Kentucky Chamber of Commerce, said imposing additional mandates on employers could harm an economy still in recovery from the pandemic.
“New wage mandates from Frankfort would harm job creation and reduce overall employment,” Shanks said. “Recently, many Kentucky employers have significantly increased wages and benefits to attract and retain talent. State policymakers should support these businesses and encourage further sustainable wage increases through pro-growth measures such as tax reform and limiting government regulations.”
At the federal level, Republican Senate Majority Leader Mitch McConnell said the federal minimum wage is “worth discussing” because “it hasn’t been raised in quite a while,” but many Republicans say $15 is too steep for small businesses.
Still, Thomas said he anticipates bipartisan support for BR 91, noting “the sentiment has changed significantly” amid worker shortages spurred in part by the COVID-19 pandemic.
“Many people decided that, ‘I’m going to develop my own gig or my own livelihood and do that kind of work as opposed to going back to work in an office or in a setting where I’m constantly coming in contact with people,’” Thomas said. “It’s dried up a lot of people who had a job at one time. Those people are not coming back to the workforce. This COVID environment has changed the way people look at work.”
According to the Foundation for a Healthy Kentucky, most Kentuckians favored raising the minimum wage to $10.10 in 2016, including 67% of adults in western Kentucky. Data from the Pew Research Center shows 62% of Americans support a $15 federal minimum wage, and most opponents want a more modest increase.
Small Business Majority, a nonprofit small business and advocacy and research organization, found in a 2015 opinion poll 45% of small business owners strongly favor raising the minimum wage to $12 per hour, whereas 15% strongly oppose doing so.
