With the passage of minimum wage increases in
Nebraska,
Arkansas, an already higher minimum wage in
Colorado and throughout the midwest, Kansas found itself holding onto the $7.25 minimum wage at $2.13 tipped wage minimums.
Representative Jim Ward (D-Wichita), announced yesterday that this standard is putting Kansas farther out of balance with nearby peers, and a solution to minimum wage may be a key component in addressing the state position on woeful revenues.
http://www.kansascity.com/...
WICHITA, Kan.
A Wichita Democrat is sponsoring a bill that would raise Kansas' minimum wage by $3 over the next three years, and although it's unlikely to pass in the Republican-dominated Legislature, it could help focus attention on the issue.
Rep. Jim Ward's bill would raise the state's minimum wage from $7.25 to $8.25 an hour on July 1, and by $1 an hour in each of the next two years, eventually hitting $10.25. Ward said he expects opposition from House Speaker Ray Merrick, a Stillwell Republican, and others, but he said the issue should be debated.
There is no doubt that Republican opposition to this will be significant. However, raising the minimum wage may help solve the problem they all wish to avoid - an assist to the current state budget crisis.
States find that competing for job base and residents have significant impact on their bottom line, and despite threats that raising the minimum wage will impact their job base, study after study has indicated that depressed minimum wage standards against neighboring states and counties may have more impact.
In a 2010 study on counties and states bordering different minimum wage terms, http://www.irle.berkeley.edu/... and in a 2011 study on minimum wage increase impact on teen wages and employment, http://www.irle.berkeley.edu/... the end conclusion was painfully obvious: businesses simply can't afford to cut massive jobs at minimum wage, where the majority of employment is within the restaurant business. In fact, in many cases those same employers see an uptick in revenue in part because those who are earning near the minimum wage line have a tendency to SPEND. They aren't earning enough for significant savings, and tend to spend what the bring in (paycheck to paycheck).
This, however, doesn't stop Kansas Republicans from screaming no - despite the minimum wages of nearby states.
In order to get experts to speak on the issue, Terry Newman took to the press.
http://www.kake.com/...
Terry Newman recently sold his Wichita Papa John's restaurants but still owns restaurants in other locations. Newman says very few workers were actually paid minimum wage. "Who was making minimum wage was the non-bread winners of the family.. the 16-to-24 year old kids who were in college."
Newman says he sees the issue both ways. "There's a whole balance. You either have to raise prices. You're going to have to cut quality. You may have to cut staff."
"That's either going to cut into the charitable contributions we give back. That would cut into the new buildings we could build. That's going to cut into profits. That's why I said there's a give and a take. And I'm all for the balance."
It's uncertain what the level of charitable giving he did as an outsider. Newman's plan to work to help benefit Non-Profits in a Profitable way, announced in 2010 ceased responding in 2011. (
http://www.bizjournals.com/... ).
However, if charitable giving will be minimized because you have to maintain a set level of revenue in profits, then it isn't as much charity as it is a tax write off.
Newman however isn't alone, as the Wichita Chamber of Commerce also voiced their discontent.
http://www.kake.com/...
The Wichita Metro Chamber's 2015 legislative agenda promotes a business environment that encourages investment, innovation and job creation. We believe a low-cost business environment is critical in order to be a competitive and attractive business destination.
Therefore, we are not supportive of increasing the minimum wage at this time. We believe an increase in the minimum wage could increase business costs, resulting in potential job losses and higher prices for consumers. Letting the free market determine wages is a more efficient and beneficial process for employers and employees.
The Wichita Chamber of Commerce argument that business relocate in order to take advantage of low minimum wages seems contradictory with the largest group that hires minimum wage workers: restaurants.
Almost 33% of all those employed at minimum wage work in fast food or restaurant environments. And the tipped wage reflects an overwhelming percentage of those working in food service. (http://nelp.3cdn.net/...). Why is this important? Because the Chambers argument that businesses will relocate or avoid locations based on minimum wage is laughable on it's face. No one is driving from Wichita to Oklahoma for a hamburger, and restaurants are far more concerned about incoming revenue, based on location with consumers instead of minimum wage which is easily offset with less impact.
But Kansas has another significant reason to consider raising the minimum wage: as the state budget deficit continues to worsen, sources of income become necessary.
A new influx of fresh revenue from consumers who spend their new found earnings helps offset the unbelievable tax breaks given to corporate entities in Kansas over the last four years.
Kansas Democrats are unlikely to get passage on a minimum wage increase, but a state wide appeal to address this issue now is not only worthwhile, it is a chance to put on the record where people stand on helping those who make 'just above' the minimum wage.