Published July 2nd, 2015 at 10:00 PM4 minute read
According to an MIT Living Wage Calculator, an individual in Kansas City would require more than a $9 dollar an hour wage in order to sustain an above-poverty lifestyle.
For years, efforts to raise the minimum wage at the federal and state levels have faltered. Now, some of the biggest cities in America are taking matters into their own hands. In May, the Los Angeles City Council voted to raise the local minimum wage to $15 an hour by 2020. An ordinance awaiting approval across the state in St. Louis would match Los Angeles. Is Kansas City about to join them?
Missouri state law had prohibited cities from setting their own minimum wage, but legislation passed during this year’s Missouri General Assembly has created a window of opportunity. The language would allow cities to set their own minimum wage, but that chance expires on Aug. 28. With that date approaching, Mayor Sly James has called on the city council to cast a final minimum wage vote on July 16th.
The local organization Stand Up KC has said a $15 an hour wage by 2020 is necessary for those struggling to get by. But business owners have said those wages could cause them to cut jobs, reduce hours, or go out of business. Mayor James has said a $13 an hour wage is more reasonable.
On Monday, June 29, the Kansas City Chapter of The Village Square and KCPT hosted a debate about whether or not to raise the minimum wage in Kansas City. The debate was separated into two separate panels; one featured local leaders and the other featured national economists.
Kansas City leaders discuss local implications
Sitting on the local panel were Carlos Gomez, president/CEO of the Hispanic Chamber of Commerce of Greater Kansas City; Rev. Dr. Vernon Howard, Jr., Senior Pastor at St. Mark’s Church and President of the Southern Christian Leadership Conference of Greater Kansas City; Annie Presley, principal at McKellar Consulting; and Lara Granich, director of Missouri Jobs With Justice.
The opposition to a wage increase, Annie Presley and Carlos Gomez, say that small businesses can’t afford the $15 an hour wage advocates have called for, a 97 percent increase.
Gomez said some small businesses he works with though the Hispanic Chamber of Commerce have said a wage increase of that magnitude could cause lay offs, a reduction in workers’ hours, and even businesses moving out of the city.
“We need those small business. You will not have a healthy neighborhood without healthy small business on that local corner,” said Gomez.
But Lara Granich said that the gradual increase to $15 an hour over a number of years will give businesses enough time to adapt.
“We see the cities that have already increased their minimum wages, so that they’re already at a high level, the sky hasn’t fallen. There’s really no research showing there isn’t a way for the economy to adapt to a $15 dollar minimum wage,” says Granich.
Annie Presley used an example of her baker’s 17-year-old son working at a pizza restaurant to highlight why the minimum wage plays the role of an incentive for people to work their way up.
“It doesn’t matter if it’s a high school kid or a mom who wants to go back to work, they have to start somewhere, and you can’t start at a wage that you don’t have a skill set for,” said Presley. “From all the jobs I created over the years in my four businesses, it seems like it worked.”
But Howard argued that increasing the minimum wage is a moral issue. He said those who wish to work are worth more than the current minimum wage and it needs to be addressed.
“If we do not, we will see the kinds of public safety and public health issues not just centered around Troost and Van Brunt, not just centered around the river and 85th street, but we will see it pour over into other areas as well. This is about the urban core in Kansas City, but also it is about the total metro and how we become a community,” says Howard.
National economists dissect research
The second panel consisted of Scott Lilly, senior fellow at the Center for American Progress, Michael Saltsman, research director at the Employment Policies Institute, Bill Greiner, chief investment strategist at Mariner Holdings and Forbes Magazine contributor.
Scott Lilly said that a 1992 study out of the New Jersey Legislature shows that the claims about reductions in employment after wage increases are unfounded. The study looks at fast-food restaurants along the New Jersey and Pennsylvania state line after an increase in New Jersey’s minimum wage.
“What they found, interviewing them before the minimum wage was increased and interviewing them after, was the labor change in both states was about the same,” said Lilly.
The reason labor change remained the same, he said, is because the restaurants saved money on training. The raise in wages decreased turn over, allowing them to save money on training with a slight increase in prices.
“There are some times when raising those wages are good for employers, even when they don’t know it,” said Lilly.
But Michael Saltsman responded that when you when you look at the research in its totality, you see that wage increases are often followed by a decrease in employment.
Saltsman said there isn’t hard data coming out of West Coast cities that have already raised the wage, but his organization is seeing anecdotes from businesses that are being forced to close.
“These are businesses that have been written up in the San Fransisco Chronicle, the Oakland Tribune, of childcare providers who have had to lay off staff and raise rates, of small pizza restaurants that have had to close their doors,” said Saltsman. “These are real stories.”
Saltsman said that his organization believes an earned income tax credit, which would boost wages through the tax code rather than wage, would be more successful at reducing poverty.
Bill Greiner, an economic historian, said he believes that a $15 dollar minimum wage would bring us into historically uncharted territory with possibly unintended consequences.
“You try to solve one problem, as was stated not he earlier panel, it’s like playing wack-a-mole, you know the little wack-a-mole game. You smack the mole on the head and another one pops up,” said Greiner.
However, Greiner also said he thinks that we could afford to raise the wage to roughly $9 dollars, which would adjust the current wage for inflation.
Mayor Sly James has called for Kansas City Council to vote on a minimum wage increase on July 16th.
KCPT and the Hale Center for Journalism present “Getting By,” a series of stories and discussions examining the impact of inequality in KC, at kcpt.org/gettingby. How do you ‘get by’ in KC? You can join our discussion, here.