Kentucky Gov. Steve Beshear (R) issued an executive order Monday raising the minimum wage for about 800 state employees.
Every employee of the state government’s executive branch will see their pay increased from $7.25 an hour to at least $10.10 per hour. The increase will take effect July 1.
The executive action comes after the Metro Council of Louisville voted in December to raise the city’s minimum wage, increasing it above the federally mandated $7.25 per hour to $9 per hour by 2017. Louisville was the first city in Kentucky and the first city in the South to increase the minimum wage.
Labor unions and other organizations have notched victories in recent years on increasing the minimum wage in states and municipalities. Voters in Alaska, Arkansas, Nebraska, and South Dakota approved increases in their states’ minimum wage during the 2014 midterm elections, as boosting the minimum wage has remained a popular policy across the political spectrum.
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The Organization for Economic Cooperation and Development has charged that the U.S. minimum wage should be around $12 an hour, considering a range of factors regarding the nation’s wealth.
The Los Angeles City Council voted in May to increase the city’s minimum wage to $10.50 an hour by July 2016 and then to $15 by 2020. Once the city’s minimum wage reaches $15 per hour, it will be roughly equivalent to $9.75 for the average American worker today, according to projections published by FiveThirtyEight.
The minimum wage in Seattle increased in April from $9 per hour to $11 per hour for all employers with 500 or more workers. Wages must increase to $10 per hour for smaller employers.
Beshear, who will complete his second term in December and is term limited, said in a statement that it’s “unacceptable” that there are people working full-time jobs who can’t make ends meet.
“A raise of less than $3 per hour may be enough for some employees to move off government assistance programs,” Beshear said. “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 pay raise will affect 510 workers who earn less than $10.10 per hour. Another 269 workers who earn around $10 per hour will also receive an incremental pay raise. Employees who are paid tipped wages will see an increase in their base hourly income from $2.19 an hour to $4.90 an hour, matching recent federal changes.
Private companies with state government service contracts will also be required to pay employees on those contracts a minimum wage of $10.10 an hour. That requirement will be added to contracts as they come up for renewal.
The raises will cost the state $1.6 million, but less than $800,000 of that cost will come from the state’s General Fund.
Raising the minimum wage has been on Democrats’ legislative agenda for the past few years. House Speaker Greg Stumbo (D-Prestonsburg) has introduced bills during the last two legislative sessions to raise the minimum wage.
The issue was one of the centerpieces of Democratic U.S. Senate candidate Alison Lundergan Grimes’ failed campaign against Republican U.S. Sen. Mitch McConnell. Republican lawmakers have opposed Democratic bills to increase the minimum wage, and they were critical of Beshear’s actions.
“Gov. Beshear is taking a page out of the Obama administration’s playbook by forcing through failed legislation by executive action,” House Minority Leader Jeff Hoover (R-Jamestown) told the Louisville Courier-Journal. “It seems Gov. Beshear apparently now understands he doesn’t have to pass another budget and feels comfortable in adding to the strain on Kentucky’s finances.”
Beshear told the New York Times that governors in other states should follow his example.
“There are a number of states where the chief executive favors raising the minimum wage but has issues with their legislature in terms of getting a statewide minimum wage increase passed,” Beshear said. “I would certainly encourage them to take a step like this.”
A federal minimum wage increase to $10.10 per hour would allow nearly two million people to get off of public assistance and save $7.6 billion annually, according to a study by the Economic Policy Institute.