Minimum Wage Increase Bill Stalled in the Senate

Date: May 17, 2016 Last Edit: May 18, 2016

Proposal would create a ripple effect of untenable labor cost spikes.

Minimum Wage Increase Bill Stalled in the Senate

Gov. John Bel Edwards’ proposal to increase
Louisiana’s minimum wage has hit roadblocks in the Senate, thanks in part to
opposition efforts from NFIB.

The bill, sponsored by Sen. Karen Carter
Peterson, narrowly passed the Senate Labor Committee in April, but had to be
sent to the Finance Committee because of costs that would be added to the state
budget. The measure would provide a pay increase for about 200 state workers,
to the tune of $204,000, in addition to $44,000 in state agency costs to
enforce the wage, NOLA.com reports. On May 2, a scheduled hearing for the bill
in the Finance Committee was canceled, and at this writing, Gov. Edwards was
still negotiating with lawmakers to try to shore up the votes.

NFIB/Louisiana has been working with the Senate
to block the bill, including testifying against it in the Labor Committee. Dawn
Starns, NFIB’s Louisiana state director, also recently spoke about the impact
to small business on the Jim Engster Show.

 Under the measure, the minimum wage would be
hiked from the federal rate of $7.25 per hour to $8 in 2017 and $8.50 in 2018.
Starns pointed out that deviating from the federal rate opens the door to
continually changing rates at the hands of the Legislature.

 “To be sure, once they have the ability to do
that, that proposal will come every year,” she said. “It’ll be 50 cents this
year, 50 cents next year, 50 cents the following year. It’ll become a political
hot-button issue every year. It’ll become a difficult situation for legislators
in election years, it’ll become a campaign promise like it has been for the
governor, and the economy should not be politicized that way. Small business
owners need to be able to run their business in a predictable way, and to have
the minimum wage become this fluctuating nightmare would not be what we need to
have.”

Starns also noted that it wasn’t just about the
specific increase to the minimum wage, but about the ripple effect that a wage
hike creates for all hourly workers, even if they are earning a higher rate
than the minimum wage. Someone earning $9 per hour, for example, is going to
expect a raise if a new worker comes in earning nearly the same from the
beginning, without having spent the time learning skills on the job. This means
a small business owner’s labor costs increase significantly beyond just minimum
wage workers.

 “This is a mandate that small business does not need to have put on them
right now,” she said. “We are in a recession, we are fighting to stay open and
keep people employed, and having a new government mandate forcing businesses to
pay unskilled labor more than what they should be paid at this point is an
untenable position for us.”

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