La. Legislature considering minimum wage increase

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Louisiana legislators are considering bumping up the state’s minimum wage, as well as a bill to address the state’s gender pay gap.

SB 269, introduced by Karen Carter Peterson, D-New Orleans, would raise the state’s minimum wage to $8 per hour starting next year and increasing it to $8.50 per hour in 2018. SB 347, introduced by Troy Carter, D-New Orleans, would allow parishes and cities to set their own minimum wages.

SB 269 is currently stalled in the state Senate, while SB 347 has been read and amended and is subject to call on the Senate floor.

Louisiana is one of five states with no state minimum wage, joining Alabama, Mississippi, Tennessee and South Carolina. Those states all adopt the federal minimum wage of $7.25 per hour. Other states have set their minimum wage at or below the federal level; 21 states have a minimum wage set at $7.25 per hour.

Peterson’s bill comes with what would seem to be wide support among Louisiana residents, according to a statewide survey. The 2016 Louisiana Survey, conducted by LSU’s Reilly Center for Media and Public Relations, found that 76 percent of Louisiana residents polled support raising the minimum wage to $8.50.

While Democrats and Independents had the strongest support for the wage hike, a majority of Louisiana Republicans favored it, as well.

Michael Henderson, research director at the LSU Public Policy Research Lab, said raising the minimum wage received 74 percent support in 2014, the last time the annual Louisiana survey asked about it.

According to Henderson, the favorability of the wage raise across the political spectrum could be encouraging for the bill’s prospects in Louisiana.

“What’s critical is not just that the majority is so high or that the percent support is so high,” he said. “It’s also that it’s broad. You have a majority of Democrats and a majority of Republicans supporting it.”

One such supporter is Gerriet Stovall, a fry cook at Griffin’s Poboy and Grille in his native Houma. Stovall said he loves his job and is thankful to have it after his previous employer, WOW Café, closed. However, even with a 40-hour work-week, Stovall has found it challenging to make ends meet on $7.50 an hour. He said a bump up in pay would make his situation “way better.”

“I feel like I’d be able to get a lot more accomplished. Then I won’t have to wait and wait and wait until next check to pay something that I had backed up. That would be awesome if they [raise the minimum wage],” Stovall said.

Getting more accomplished for Stovall would include paying off debt acquired from previous loans. More importantly, it would mean providing more for his two children, a 4-year-old son and 4-month-old daughter, and helping his mother, who is financially supporting her own mother. Stovall has to help pay for his son’s daycare and recently teamed with his son’s mother to fund his birthday party, something he had to save for two months in advance.

“It’s not just daycare and stuff. Kids want things. You want to make them happy. You can’t give them everything they want, but you still want to make them happy,” the fry cook said.

A minimum wage worker in Louisiana working 40 hours per week would earn about $15,000 per year before taxes. The 2015 federal poverty threshold for a household with one adult and one child is $16,337. The threshold for a family of three that includes one child is about $19,000. Erica Zucker, policy advocate for the Workplace Justice Project in New Orleans, said the proposed bill would mean a raise for almost a quarter of a million Louisiana residents, but would not be substantial enough.

“We don’t think the proposed increase goes far enough. Even though 240,000 workers are going to get a raise, it’s not high enough to raise most workers out of poverty or even to sustainable wages,” she said.

According to Renee Amar, director of the Small Business Council for the Louisiana Association of Business and Industry, minimum wage jobs are not meant to be long-term sources of support for families. Amar said the proposed law would be an artificial means for government to raise wages, when a competitive market and acquiring training is the best way to raise wages.

“We just really believe in the free market, and that the market should determine what the wages are. When you’re in a competitive environment, that’s what typically drives wages up,” she said.

Amar said the wage raises could mean concurrent wage increases for other employees, which would in turn result in more company contributions toward Social Security and Medicare taxes. According to Amar, the increased costs would force businesses to make tough decisions with their money.

“Do I maybe just cut hours? Maybe I just cut one or two employees. Maybe there’s a little capital expense that I can’t put out. They just have to make certain decisions about their business and their expenses that they weren’t planning on making before,” she said.

Zucker said she has not seen significant jumps in unemployment play out in other states that have translated into higher bumps in pay than what Louisiana lawmakers are considering. She does not expect a massive hike in prices for consumers if Carter Peterson’s bill passes.

“We’re not talking about a need for huge increases in prices. Particularly with large businesses, they don’t need to increase prices at all. They just need to have a slightly lower profit margin. They’d still be quite profitable,” she said.

Another bill LABI opposes is SB 254, authored by J.P. Morell, D-New Orleans. SB 254 would expand Louisiana’s Equal Pay Act, which currently requires equal pay for equal work at a company, regardless of employee gender. Morell’s bill would make the law include comparable work in its language. If passed, an employee would be able to take his or her company to court to determine if he or she is underpaid in comparison to a coworker’s similar job.

Amar said the expansion of the law could result in constant court cases for companies, as the concept of “comparable” is vague and open to interpretation.

“If I have an IT company and I’ve got IT specialist 1 and 2, those are two separate job descriptions. Obviously, that would probably be pretty close to comparable, right?” Amar asked. “Well this, in our mind, is saying you’re taking somebody who does hardware support and comparing them to somebody who does training or software support, when possibly the market is totally different in those job areas.”

In 2014, Louisiana had the largest pay gap between genders in the country, with a woman earning 65 cents for every dollar a man makes, compared to the U.S. average of 79 cents. Amar said the pay gap could be explained by the difference in jobs, as science, technology, engineering and mathematics (STEM) job markets have large male majorities. Amar said LABI’s usual answer to the wage gap is to encourage more females to get involved in the STEM fields.

“I guess in some folks’ mind, there is some inherent discrimination, but we’re just really not hearing it,” he said. “Our employers are so desperate for employees that obviously their gender does not matter to them. So it’s a misnomer; it’s not equal pay for equal work.” •