FRANKFORT, Ky.– Governor Steve Beshear is raising wages for state government’s lowest-paid workers. Beginning July 1, every person working for the executive branch of state government will earn at least $10.10 per hour, except for tipped employees whose wages will be more than doubled to $4.90 per hour.
Governor Steve Beshear ceremonially signed an executive order to institute the new pay policy at the Kentucky Horse Park in Lexington and at the Kentucky School for the Blind in Louisville. The current state minimum wage is $7.25 an hour. The new policy will affect nearly 800 state employees.
“When people work hard at a full-time job, they should have enough money to live on. Right now, at minimum wage, they don’t. That’s unacceptable,” said Gov. Beshear. “A raise of less than $3 per hour may be enough for some employees to move off government assistance programs. That empowers workers and lowers costs for taxpayers. Kentucky businesses should follow the example we’re setting as the state’s largest employer and raise the minimum wage for their workers.”
The policy change affects 510 workers who earn less than $10.10 per hour, as well as an additional 269 who earn around $10 per hour who will see a small raise. Tipped employees, such as restaurant servers, will see an increase in their base hourly income from $2.19 an hour to $4.90 an hour, which matches recent federal changes.
Raising these wages will cost about $1.6 million, and less than $800,000 of that cost will come from General Fund dollars.
The new policy also requires that private companies with service contracts with state government pay a minimum wage of at least $10.10 an hour to those of their employees who perform work on or in connection with those government contracts. That requirement will be added to contracts as they come up for renewal.
Veterans nursing homes, behavioral health facilities, and state parks most affected
Of the 510 employees who currently make less than $10.10 an hour, more than a third work for the Kentucky Department of Veterans’ Affairs, many of them caring for Kentucky veterans in the state’s veterans nursing homes. Another 90 people work in behavioral health agencies, taking care of vulnerable Kentuckians. Other large groups of low-paid employees work at state parks and at the Department of Natural Resources.
“The irony here – and it’s an appalling irony – is that the people we have tasked with the difficult job of caring for our vulnerable populations are paid so little that they too are vulnerable, at least when it comes to financial security,” said Gov. Beshear.
Raising the wage can move workers off food stamps, reduce turnover
A single person with no dependents working full time at $10.10 per hour would no longer be eligible for food stamps or for Medicaid. If this policy were instituted statewide or nationwide, the newfound self-sufficiency would save even more taxpayer dollars, the Governor said. The Cabinet for Health and Family Services estimates that a statewide increase in the minimum wage would move 13,000 Kentuckians off Medicaid.
Raising state government’s minimum wage will also help reduce turnover in low-paying jobs, cutting the costs of training, increasing productivity and reducing inefficiency. “As the economy accelerates, the job market grows more competitive. These critical state agencies need qualified workers to deliver services to our citizens. State government needs to take this important step to be competitive for this key workforce.”
Gov. Beshear challenged business owners and other employers to follow the state’s lead, and stressed that common arguments against raising the wage don’t hold up to scrutiny.
“It’s easy to parrot the same tired sound bites against raising the minimum wage, but any reasonable review of unbiased research shows that raising the wage is a smart business decision,” said Gov. Beshear. “Plus, many of the long-held assumptions about who earns minimum wage are just flat wrong.”
Myth: Raising the minimum wage causes job loss.
Fact: A 2009 meta-analysis of 64 economic studies found that the minimum wage had no negative impacts on employment. Furthermore, the 13 states that raised their minimum wages at the beginning of 2014 added jobs at a faster pace than those states that did not.
Myth: Raising the minimum wage benefits primarily teen-agers.
Fact: 87.5 percent of the people who would benefit from raising the minimum wage are over the age of 20. More than a third – 34.5 percent – of minimum wage earners are over the age of 40.
Myth: Most people who make the minimum wage work part time.
Fact: More than half of minimum wage earners (53 percent) work full-time, and more than 85 percent work at least 20 hours a week.
Myth: People working for the minimum wage live in households with sufficient income.
Fact: Almost 69 percent of minimum wage earners live in households whose total income is below the U.S. median family income.
Myth: Raising the minimum wage will hurt restaurants.
Fact: Of the ten states predicted by the National Restaurant Association to have the fastest restaurant industry growth, six of those states have minimum wages higher than the federal minimum.
“Hundreds of state government workers are caring for our veterans in nursing homes, maintaining our parks system and helping our adults with mental disabilities for about $15,000 a year. That’s a disgrace. Raising their pay is a moral imperative,” said Gov. Beshear. “I call on every business leader and local government to take a hard look at the facts. Paying our people a living wage isn’t a fiscal backbreaker, and the impacts will be extraordinarily beneficial.”
Released by the Commonwealth of Kentucky Office of the Governor
Contact: Kerri Richardson 502.5642611 502.330.6633 and Terry Sebastian 502. 5642611 502.229.6130