The bill presented earlier this month to raise the Kansas minimum wage from $2.65 to $7.25 never made it out of committee.
Sen. Roger Reitz, R-Manhattan, said the chairman in the state Senate Commerce Committee did not agree with the bill, and it therefore was never heard by the committee.
Kansas currently has the lowest state minimum wage in the nation. According to an article in the Topeka Capital-Journal, this was the 15th bill of its kind to fail since the $2.65 rate was set in 1988.
“It’s just ludicrous,” said Reitz. “It’s not something we ought to be very proud of here in Kansas.”
But Don Fayler, president of the Kansas Restaurant and Hospitality Association, did not share the same concern for the bill. He said the association did not think the bill was necessary because few workers in the state actually make the minimum wage income.
“Who’s going to work for that?” he said. “Nobody. It’s a pointless law. People get all up-in-arms about it, but so what? Nobody’s making $2.65, everybody’s making over minimum wage anyway. … We’re not against people making a decent wage by any means, but we’ve contended with this for some time with the Department of Labor as far as who’s really paying $2.65 an hour.”
Fayler said those mostly working at minimum wage are tipped employees who, when tips are accounted for, make more than the minimum. If the bill were passed, he said employers with tipped employees would have been forced to increase their base pay by $1.50 per hour, which Fayler said isn’t business friendly.
“That money’s got to come from somewhere,” he said. “So they’re looking at raising prices to cover it. It’s also counterproductive to other employees that are making over the minimum wage, because they’re saying, ‘Well, he got a pay increase, where’s mine?’ It’s inflationary for the overall pay scale.”
But K-State economics professor Jim Ragan said if the bill had passed, the effects in terms of higher prices would have been mild.
Ragan said if wage rates increase, the cost of business also will increase, ultimately increasing costs for consumers. However, state minimum wage only applies to the small percentage of businesses that do not engage in interstate commerce and those whose sales are less than $500,000 annually. Those who do not meet one of those descriptions are subject to federal minimum wage, which is $5.85 an hour. Credit card transactions are considered interstate commerce.
Though the number of Kansans receiving the state minimum wage is small, they should not be overlooked, Reitz said. He countered Fayler’s claim by saying there are currently 17,000 people in Kansas who are being paid $2.65 an hour, an amount that he said is impossible to make a living on.
If the minimum was increased, Reitz said it not only would give those workers an opportunity to get by, but also might create competition for businesses participating in interstate commerce, prompting them to increase wages as well.
“I think it’s really a political issue more than economic issue,” said Ragan. “A [different] way government could help with low wage workers to increase their pay would be through some alternative program – make it possible for workers to get additional schooling.”
Fayler also offered an alternative to the bill and said the state minimum wage should be repealed altogether and reverted to the federal amount. But Reitz said he is a firm believer in keeping and increasing the state minimum.
“I’m disappointed it didn’t pass,” he said, “but we’ll try it again next year, just like we did this year, and just like we did last year.”