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Louisville's Minimum Wage Debate From the Perspectives of Business Owners and Low-Income Workers

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Time is running out for Louisville Metro Council to approve a minimum wage increase before 2014 ends.

If the proposal is approved, the minimum wage would increase from $7.25 an hour to $8.10 by July 2015, to $9.50 by July 2016 and finally to $10.10 by July 2017.

The issue has led to heated debate in Louisville, pitting business interests against concerns for low-income workers.

For some people, like Bradley Mitchell, a minimum wage increase could mean a better quality of life. He addressed the Labor and Economic Development Committee a few weeks ago as an advocate for boosting the minimum wage. Mitchell’s current job pays him $8 an hour, and he told committee members if they truly cared for their constituents, they would vote to raise the minimum wage.

“I’m one of those people that have struggled constantly trying to provide for myself,” Mitchell said. “I’m ready for that right of life, liberty and pursuit of happiness, I’m ready for that.”

Mitchell is among 62,000 Louisville workers who'd benefit from a minimum wage increase to $10.10 in the next three years, according to a recent study by the Kentucky Center for Economic Policy.

But some opponents of raising the minimum wage say it’s the indirect costs that will hit hardest. John Varanese, owner of Varanese Restaurant on Frankfort Avenue, said a local ordinance to raise the minimum wage will reach beyond his lowest paid workers.

“My $10 an hour cook is going to want $12 now,” he said. “Everyone is going to get a raise except for me and my three managers."

'The Last Place'

Varanese said he also has concerns that higher wages will lead to heightened food costs.

Other opponents say the push to raise the minimum wage on a local level is coming too quickly, and that the research been cited during months-long debates has been without specifics on local impact.

Brian Reetz, general manager of two JR Pizza Enterprises, which owns 15 Pizza Hut franchises in Louisville and employs nearly 400 people, said before he will support raising the minimum wage he needs to see proof that it would benefit the community.

“If you can present the data that shows that this helps businesses, this helps the community, this helps the people in the community, then great,” he said.

"Don’t just say that we are going to raise it because other cities are raising it and we need to be the leader in this arena because we need to be. That doesn’t make sense to me.”

Varanese agreed. He said the cost of living in Louisville pales in comparison to larger cities like San Francisco and Chicago, two cities in which the minimum wage has been boosted by local government.

“Louisville is the last place that needs to address this, because we have one of the lowest costs of living in the United States, there’s not as many people in poverty here as compared to other cities,” he said.

The living wage for a single adult with one child in Louisville is just more than $17 an hour, according to the Massachusetts Institute of Technology. In contrast, the living wage for one adult and one child living in San Francisco is nearly $26 an hour.

Varanese—standing in the kitchen of his Frankfort Avenue restaurant deboning ducks for a special holiday dish he will sell to customers for up to $170—said the people “complaining about minimum wage are complacent.”

“These are people that have no goals, they’re minimalists, they’re looking for the most minimal thing to get by,” he said.

Varanese said the minimum wage should be a starting wage, not a living wage. He said a resident shouldn't expect a minimum wage income to provide for a family.

“You shouldn't have a family of four on minimum wage, you shouldn't be at that age being paid minimum wage," he said "Where was your drive and your goals?"

Working and Homeless

Nearly 18 percent of Louisville residents live at or below the poverty line, according to U.S. Census data. That’s about 110,000 people.

Krystal Hedges is a single mother in Louisville with two kids, a 5-year-old and an 18-month-old. She works at a local church and earns $10 an hour.

Though she logs about 30 hours a week, she said the money she brings home each week isn’t enough.

“With my income and my bills, I’m basically negative $100 and something on my budget,” she said. And home for Krystal and her two children is a cramped room at the Volunteers for America shelter in Old Louisville.

The room is about five paces wide and maybe 12-feet deep. There is a small window with tattered shades. Her son sleeps in a crib and she shares a bunk bed with her daughter.

“It’s pretty small,” she said.

More than half of the people that stay in area shelters are employed, said Natalie Harris, executive director for Coalition for the Homeless.

“They just can’t get enough income or enough hours to be able to make it,” she said.

At the shelter, Hedges said she is able to save more money than she would if she had a monthly rent or mortgage payment. And though it's money that will go towards a place of her own and getting her back in school, she said she's upset by her current living condition.

“It’s embarrassing, it makes me feel sometimes like I am less than a woman," she said.

Hedges said she never planned on being a single mother with two kids and a low-paying job. But, she said “life happened.”

Her mother developed a drug addiction when she was a teenager.

Hedges had to drop out of school to get a job and support the family. She quickly earned her GED and enrolled in nursing school. But she said an abusive relationship led her to withdraw just five months shy of graduation.

Hedges, now in her early 30s, is looking at getting a second job. But she said raising her two young children, caring for her now disabled mother and going to her current job leaves little time for anything else. When it comes to money, every bit counts.

“Do you buy diapers or do you put gas in your car? Do you buy that happy meal or do you put gas in the car?” she said. “I don’t have anyone I can ask for money, it’s been me, since I was 16.”

Metro Councilman David James, a Democrat and co-sponsor of the bill to raise the minimum wage, said the ordinance is about more than enabling the poorest working residents to earn more money.

“I just hope that the city that says it’s the No. 1 compassion city in the country would be able to show some compassion.”

If the ordinance on Monday passes the Labor and Economic Committee, it will move to the full council for a vote.

Jacob Ryan is the managing editor of the Kentucky Center for Investigative reporting. He's an award-winning investigative reporter who joined LPM in 2014. Email Jacob at jryan@lpm.org.

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