On Oct. 20, the Kentucky Supreme Court invalidated Louisville’s recent minimum wage increase with a 6-1 vote, which also invalidated Lexington’s minimum wage increase that aimed to gradually raise the city’s minimum wage to $10.10 an hour by July 1, 2018. Lexington’s minimum wage will be reduced to the federal minimum wage of $7.25 that was made effective in 2009, but Transylvania students with Federal Work Study jobs will continue to receive $8.20 an hour.
“Lexington and Louisville have a different status than the other cities in the state,” said Political Science Professor Dr. Don Dugi. For example, Lexington is considered a merged government, and Louisville has the status of a Class One city. Because of this, the two cities have what Dugi defined as home rule, or “the ability to determine rules and regulations, ordinances for itself.” Because of the powers granted by home rule, Lexington and Louisville local governments assumed that they had the authority to make decisions regarding increases in their minimum wage
Most minimum wage jobs are only part-time jobs, allowing employers to have labor without having to supply benefits.
“Ordinarily, people have to pay rent, they have to pay for food, [and] they have to pay for transportation. But for people who are working less than full-time jobs, they have to add a fourth major component, and that’s insurance. And you could add a fifth to that, too, if they try to provide for their retirement,” said Dugi.
Without benefits, minimum wage workers are often forced to obtain multiple part-time jobs to pay for necessities. Due to having no benefits, they work day to day, knowing that they are only one illness away from being on the streets. Transy students do not necessarily have the worry of ending up without a roof over their heads, but countless students enrolled at Transylvania, along with students at other colleges, must work multiple jobs in order to pay for tuition and other necessities of everyday life.
As a solution, Dugi suggested some form of standardization. “The easiest way to deal with the minimum wage problem is to have the national government establish a wage.” Standardization would restrict variability that exists between states and, in Kentucky’s case, cities, as well.
Dugi pointed out that the issue is federalism. “Having fifty different sets of rules about salaries, about education, about all these different things — it makes for a very disjointed society.”
The justice who had the dissenting opinion in the vote concerning the minimum wage in Lexington emphasized that the state constitution suggests the national minimum wage be just that- a minimum amount of money that employers must pay their employees, while still allowing for employees to be paid greater amounts depending on more localized circumstances.
“If people make more money… it provides a tremendous stimulus to the economy because they’re going to be spending that money,” said Dugi, demonstrating benefits of a higher minimum wage.
Dugi notes the short-term disadvantages of a minimum wage increase, such as high cost for employers. “But that can be offset by increased sells and things like that,” says Dugi.
While minimum wage is worth considering for economic improvement, there is also a question about the number of available jobs.
“The jobs that used to exist in industry have been largely outsourced… Corporations are now multinational corporations, and they move about the world to wherever they think they have the best tax advantage, the cheapest labor.” Due to globalization, Dugi said, “We don’t have a lot of options for people who are minimum wage employees.” The jobs that do exist for minimum wage earners are mainly in the service industry.
Dugi considered the Supreme Court decision as part of a larger picture, having to do with inequality in the US. “It bothers me that we keep a fairly high level of working poor in this country because if people are going to have a full life it means being able to participate in all aspects of life, including things like politics. If you’re worried about where your next meal’s coming from, you’re not going to be particularly concerned about what’s going on in the world or what’s going on in your community other than putting food on the table. That seems to me to diminish human life rather dramatically.”
While employers have the option to reverse their employees’ pay rates, Transylvania students under the Work Study program are fortunate in that they can continue to receive higher wages for less work. According to recently-retired Assistant Director of Financial Aid Dave Cecil, “President Carey has decided that the hourly pay rate for Federal Work Study students will remain at $8.20.” The fact that many Transylvania students must work off-campus jobs, often earning minimum wage along with on-campus Work Study jobs, shows the inability for such low wages in order to be sustainable. Students at Transy already have an advantage in that they are accumulating career opportunities. However, this is not a reality for many individuals, who will spend their lives in minimum wage jobs positions.