Bill to increase minimum wage tabled
March 7, 2014
Minimum wage earners will not get a raise from the Legislature this year, but their cause is not completely lost. A bill proposed by Rep. Lynn N. Hemingway (D-District 40) would have raised the current minimum wage from $7.25 to $10.25 an hour. However, it was debated by the House Health and Human Services Committee on Tuesday, March 4, and was returned to the House Rules Committee with a recommendation it be sent to Interim study.
"Initially, I did not know there would be any interest at all in the bill by the [House Health and Human Services] Committee," he said. " the end of the hearing, there was a real interest in delving into this issue a little further."
H.B. 73, Living Wage Amendments, proposes increasing the minimum wage for private and public employees from $7.25 to $10.25 an hour as well as an increase in the cash wage obligation, defined in the bill as "an hourly wage that an employer pays a tipped employee regardless of the tips or gratuities the tipped employee receives," from $2.13 to $3.13 an hour. The bill also proposes the minimum wage and cash wage obligation to increase a certain percentage on the first day of every even-numbered year, beginning in January 2016.
At this point, Rep. Hemingway said he is planning to request a study on his living wage bill during the Interim Session. His goal is to help full-time workers in Utah who still live below the poverty line, something he said is unfair.
"If people are willing to work full-time and work hard, they don’t deserve to depend on the social safety net food stamps, welfare or other similar programs to live," Rep. Hemingway said. "My opinion is that they should be able to make a wage that covers the cost of living."
The bill proposes that the percentage increase in minimum wage and cash wage obligation every two years would match the difference between the average percentage increase of the national Consumer Price Index (CPI) for 2014 and 2015 and the CPI for 2013.
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The CPI measures the cost of food, energy, lodging, medical care and recreation, among others, for "all urban consumers." According to the text of H.B. 73, "if the percentage difference described in Sub section (4) (a) is negative, the minimum wage and the cash wage obligation do not change."
Rep. Hemingway said he wanted to make sure there was an index for an increase in wages according to the cost of living, which he added will most likely be one of the most pressing issues for interim study of the bill.
According to Rep. Hemingway, 15,000 Utahns are currently being paid minimum wage, and those that can be tracked as working for less than that total about 35,000. If the bill had passed, Hemingway estimated the state would see a potential increase in income tax revenues of $5.3 million from those workers’ wages increasing to $10.25 or $3.13 an hour.
The opposition to the bill, he said, comes from small business owners that believe having to pay their employees $1 or $3 more an hour would cause their businesses to crumble.
"It has been shown over the years that every time there is a raise in the minimum wage, there is some job loss at first," Rep. Hemingway said in response to those concerns. "But overall, there are so many positives to this that when the economy catches up, there is job gain, and businesses will be better off."
Several local businesses in Park City already pay their employees just about, if not more, than the proposed new minimum wage. A manager at Artworks Gallery on Main Street confirmed the starting pay for their employees is $10 an hour, so a 25-cent increase would not affect the business negatively.
Puggy Holmgren, a manager at The Crosby Collection on Main Street, said she thinks raising the minimum wage is a great idea. Starting pay at The Crosby Collection is already more than the proposed new minimum wage, and Holmgren said that helps keeps employees around.
"If you take care of your employees, they take care of you," she said. "There are people like me, working to stay in place, and if the minimum wage is increased, that will give them more money to spend. They can appreciate warm showers."
Blanca Gohary, co-owner of Good Karma restaurant, said she and her husband already pay their servers more than the proposed new cash wage obligation. They do so in order to keep up their retention rate.
"Speaking as a small restaurant business owner, if servers are paid better and are treated well and fairly, they are less likely to job hop," Gohary said. "That is a great thing, because the biggest drain on a small business is turnover and having to keep training new employees."
While H.B. 73 will not pass during the General Session, Rep. Hemingway said he hopes to continue to fight for the bill and resubmit a revised version next year.
"I think the most important part of this piece of legislature is to recognize that a fair wage is one that lifts people out of poverty and keeps families out of the social safety net," he said. "Those parents working two to three jobs that are unable to help their children with their school work are going to be more apt to stay home and help their kids get an education. There are just so many pluses to this bill that I hope to eventually get passed."