Advertisement

Archive for Monday, July 20, 2009

Federal law increasing pay takes effect Friday

Lifeguard Ingrid Perez, Lawrence, keeps a watchful eye over the pool Friday, July 17, 2009 at the Lawrence Outdoor Aquatic Center. Lifeguards will be among the most affected when the federal minimum wage goes up to $7.25.

Lifeguard Ingrid Perez, Lawrence, keeps a watchful eye over the pool Friday, July 17, 2009 at the Lawrence Outdoor Aquatic Center. Lifeguards will be among the most affected when the federal minimum wage goes up to $7.25.

July 20, 2009

Advertisement

In these tough times when businesses are handing out layoff notices in increasing numbers, many firms this week will hand out something you may not expect: A raise.

The federal minimum wage will increase to $7.25 per hour on Friday, and the mandated increase is being met with more mixed emotions than normal from business leaders.

“In a way yes, and in a way no,” said Randy Disoso, general manager of Lawrence’s America’s Best Value Inn, when asked whether he wished he could delay the increase that will require him to pay many on his housekeeping staff more. “Yes, because business is tough right now. But no because the more people make, hopefully, the more they will spend. We need that. We need more consumer spending.”

The minimum wage will increase from $6.55 per hour currently, and is up from $5.15 per hour in 2007. The U.S. Bureau of Labor Statistics estimates that there are at least 31,000 Kansans at or below the current minimum wage who will receive a raise come Friday, and likely several thousand more who are above $6.55 per hour but below the new $7.25 per hour minimum. That number, though, isn’t known by the bureau.

An estimate for Lawrence also is not available. But perhaps one of the larger groups handing out raises next week will be city taxpayers. The city of Lawrence has 231 part-time employees — all in the city’s Parks and Recreation Department — who will receive increases.

“In 2010, we’re anticipating that it will be somewhere around $25,000 to cover the increased wages,” said Ernie Shaw, the city’s interim director of parks and recreation.

The majority of the city raises amount to 25 cents an hour, or an increase of 3.5 percent, but about 60 employees will receive a 70-cent per hour increase, which equates to a more than 10 percent raise.

The raises come at a time when the city is budgeting just a 1 percent wage increase for general employees, and firefighters and police officers are at an impasse in labor negotiations because of compensation issues.

Kansas University senior Brandon Volz knows the increase may come at a tough time for the bosses who have to write the larger checks, but it comes at a good time for him. He’s one of 131 city lifeguards who will be receiving a 25-cent per hour increase.

“As a college student trying to work full time, it should help out quite a lot,” said Volz. “It is definitely a help to college students because fees and charges for school keep going up.”

Whether the increase will help all young workers, though, is an open question, said George Bittlingmayer, a professor at KU’s School of Business.

At $7.25 per hour, younger workers may have more competition from older workers for traditional entry-level jobs. Employers, forced to pay a higher rate, also may have higher expectations of employees.

“People who are a little younger or people who might have a little bit of a troubled work history might have a harder time getting employed because they can’t say ‘give me a chance, I’ll work for $5 an hour,’” Bittlingmayer said.

Bittlingmayer also said there may be some unintended consequences from the increase, especially when businesses are already struggling.

“I had one graduate student who used to own a restaurant,” Bittlingmayer said. “He told the class about how when he had to increase the minimum wage he went from supplying uniforms to dishwashers to making them supply their own. There are other margins businesses can adjust.”

Disoso said he wasn’t sure what adjustments his hotel business would make. But he said it would be hard for many businesses simply to pass the cost along to consumers.

“It is very tough to raise prices,” Disoso said. “Everybody is real price-sensitive.”

Advocates for the wage increase said they don’t doubt that it will create some stress for some businesses. But they also said the increase still was a move in the right direction.

“What’s clear is that the recession gets worse when people have less money to spend,” said David Burress, a retired KU economics professor and a past advocate of a living wage ordinance in Lawrence. “From the point of view of helping the general economy, increasing the minimum wage is a good thing.”

Comments

gsxr600 5 years, 5 months ago

So what about the people that make $7.5 for some fast food joint because they've been working there for years. When all new trainees are hired on at $7.25, how does that make that kid feel?

SettingTheRecordStraight 5 years, 5 months ago

"In these tough times when businesses are handing out layoff notices in increasing numbers, many firms this week will hand out something you may not expect: A raise."

Conversely, other firms will distribute additional layoff notices because of the government's meddlesome wage fixing. This move will only increase the unemployment rate.

Drop the minimum wage to $0 per hour, let the markets - not the government - determine what a job is worth, and watch employment soar.

esteshawk 5 years, 5 months ago

StaightRecord-

As we have seen over the last few months, the markets aren't always the answer. It was lack of oversite in the lending markets that got us into the current recession.

Life ain't always black and white.

Shardwurm 5 years, 5 months ago

Now we just need to make sure every teacher in America is making $150,000 and we'll be set!

9070811 5 years, 5 months ago

I guess the LJW forgot to mention that the other LONGTIME guards didn't get compensated. Oh, perhaps the guards who started at $7 an hour, earned two raises to be at $7.83. They don't get that 25 cents. Way to push us in the gutter. Speaking of raises, they are done in hours worked, not the length of time spent working there. Thanks a lot LPRD!

Alexander Neighbors 5 years, 5 months ago

dumb move............. increase min wage so that the state can collect more taxes

9070811 5 years, 5 months ago

The act was signed by President G.W. Bush

govenorteacup 5 years, 5 months ago

Does anyone find it strange that lifeguards are only paid minimum wage?

gl0ck0wn3r 5 years, 5 months ago

"SettingTheRecordStraight (Anonymous) says…Conversely, other firms will distribute additional layoff notices because of the government's meddlesome wage fixing. This move will only increase the unemployment rate."

SettingTheRecordStraight FTW! As usual, it didn't take long for someone (estes) to reply with a rebuttal that obviously misses the mark.

Eride 5 years, 5 months ago

Wage floors are stupid.

Bittlingmayer's comments are right on track.

Laughwater 5 years, 5 months ago

As a non-resident of Lawrence, let alone Kansas, I shouldn't have an opinion on this, right? Wrong. I am a Business major. I know what it is like to start at the bottom and watch the minimum wage creep up on your hard earned raises. Yes, it sucks. BUT...to me, it was a way of saying "these people started out where you got your raise too...you want to show them you are still better? Prove it!" Did you know that the Washington State minimum wage is now at $8.55/hr? How does THAT make you feel?

notajayhawk 5 years, 5 months ago

Laughwater (Anonymous) says…

"Did you know that the Washington State minimum wage is now at $8.55/hr? How does THAT make you feel?"

Pretty much the same way I've always felt - grateful I don't live in Washington.

Commenting has been disabled for this item.