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Legislature rejects state minimum-wage bill

Last Modified: Friday, April 11, 2014 12:29 PM

By Jim Beam / American Press

BATON ROUGE — Legislation that would create a state minimum wage of $8.25 an hour was rejected 10-6 Thursday by the House Committee on Labor and Industrial Relations. The state now goes by the federal minimum wage of $7.25 per hour.

Four other minimum-wage bills were also rejected by the committee, so the issue appears to be dead for the session.

Rep. Herbert Dixon, D-Alexandria and chairman of the committee, wanted his $8.25-an-hour legislation to go into effect July 1, 2015. He wanted a 90-cent increase to take place July 1, 2016, to raise the minimum to $9 per hour. A year later, annual increases would have been tied to the Consumer Price Index.

Rep. Ted James, D-Baton Rouge, led a parade of witnesses supporting a wage increase. He said the opposition says it would be a burden, “but we have done a lot for business and industry.”

Dixon said 600 national economists support President Obama’s effort to increase the wage to $10.10 per hour. The wage was 25 cents an hour when it was established in 1938 during the Depression, he said. Each time the wage was increased, Dixon said more workers were covered.

Democratic and Republican presidents have been in office when the minimum was increased, Dixon said, adding it wasn’t a party thing at those times. It has been increased 22 times since 1938.

Jan Moller, director of the Louisiana Budget Project, said a lot of people are working in the state, but they aren’t making a decent wage. He said 346,000 workers, or 20 percent of the state’s workforce, would see a raise if the minimum went to $8.25. They would be less dependent on government, and he said 63,000 would go off food stamps if the wage went to $10.10 an hour.

Moller said minimum-wage workers are making less than the federal poverty rate. The 2014 poverty rate for a family of two is $15,730, and for a family of four it’s $23,850.

A minimum-wage worker makes $15,080 a year. At $8.25 per hour, the annual wage goes to $17,160. The $9 wage would increase that to $18,720 annually.

Many of the supporters of the increase said it would also boost the economy because people would have more money to spend.

A survey done by LSU showed 73 percent of those polled support a minimum-wage increase, Moller said.

A worker for a contractor said he is making $347 a week, and that isn’t enough to take care of his children and grandchildren. Another witness said he makes $8 a hour and can’t afford a one-bedroom apartment. A third man said he is having a hard time and is making $12.75 an hour doing asbestos work. He said a $20 or $25 minimum wage would be more realistic.

Among the supporters were the Louisiana Federation of Teachers, community organizers, family advocates, the Louisiana AFL-CIO, the Service Employees International Union, the Louisiana chapter of the Organization for Women, the Greater New Orleans Urban League and Silas Lee, an assistant professor at Xavier University in New Orleans.

Many of their spokesmen said a low minimum wage has a more serious effect on women, many of whom are working two jobs to support their families. One supporter said she got her first apartment in Baton Rouge in 1973 for $52.50 per month and can’t get a decent one today for less than $400 a month. Another said fast-food workers can’t get ahead in life.

Opponents included the Louisiana Restaurant Association, the Louisiana Association of Business and Industry and the Louisiana chapter of the National Federation of Independent Businesses.

Stan Harris, president and CEO of the restaurant association, said the higher wage isn’t practical. He said business people are investing their money and that telling them to raise the minimum wage is telling them to cut their profit margins.

He said restaurants are good training grounds for better jobs and that his association provides $50,000 a year for college grants and scholarships. He said local chain stores are operated by local people, not by the giant corporations.

Dawn Starns, state director of the NFIB, said she represents 4,300 small businesses in the state that are just now recovering from the 2008 recession. She said 97 percent of the employers in Louisiana operate small businesses.

Will Green with LABI said a higher minimum wage hurts those it is designed to help. Businesses are left with two choices, he said, lay off workers or increase the cost of goods. He urged the committee to instead focus on things that will keep jobs and earnings high. He said there is a need to put people to work and train them.

Robert Newman, chairman of the LSU Economics Department, said minimum wages do more harm than good. They discourage the hiring of unskilled workers, he said, and can increase poverty levels. The root cause of low earnings is low skills, he said.

But David Gray with the Louisiana Budget Project told lawmakers that a higher minimum wage would reduce turnover and improve worker morale and productivity.

Posted By: Shelia On: 4/11/2014

Title: Minimum wage

Totally not surprised that Louisiana Legislation voted this was! Hope all of these don't expect to get re-elected!

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