The first phase of Louisville’s minimum wage increase went into effect Wednesday.
This change will affect thousands of workers in the city, according to some estimates. But economic groups say the wage hike could also have a sweeping impact throughout the American South.
“This is a big day,” said Kenny Colston, communications director for the Kentucky for Center Economic Policy.
Colston’s group estimates the hike will affect about 45,000 people in Louisville. Besides that, he said Louisville will likely open the door for wage increases statewide.
In the past his group has had a hard time selling minimum wage increases to other cities in Kentucky.
“Our examples are Seattle or Washington, D.C., or Chicago,” Colston said. “And I don’t think people in Kentucky really equate their lives to lives in those cities. They view that as bigger.”
Colston said the hope is Louisville will encourage other cities in the state.
“The fact that Louisville—a gateway to the South is now doing this,” he said. “I think it’s great. I think it should be a beacon of hope for other cities. I think other lawmakers should look at this and say, ‘If Louisville can do this then we can do this.’”
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Louisville minimum wage workers got a 50 cent pay bump on Wednesday. It’s the first of three increases. Eventually, Louisville’s minimum wage will be $9 an hour in 2017—thanks to a local ordinance passed last year.
Louisville’s effort is a “breakthrough,” said Dean Baker of the left-leaning Center for Economic and Policy Research in Washington.
He said Louisville’s increase—if it goes well—could spur interest in minimum wage increases in cities and states all over the South.
“You know, you have cities that don’t look all that different,” Baker said. “So, if Louisville could do it, can Charleston do it, can Austin?"
Until now, the wave of wage increases have been pretty much exclusive to the Midwest, Northeast and wealthy cities in California.
But red states often have liberal cities. In those places, Louisville's wage hike could be a game-changer.
But much of that depends on how things go in Louisville.
It’s too early to tell whether there will be job losses and price spikes as a result. Opponents of Louisville’s ordinance have said that’s coming, though.
There’s a lawsuit in front of an appellate court. Industry groups are challenging whether Louisville Metro Government had the authority to raise the wage here. A circuit court recently upheld the city’s law.
And even though Louisville's law just was into effect, Colston said the push for an even higher minimum wage will continue.
“I mean, $9 an hour is nice, this is a great step,” he said. “It’s a lot better than $7.25, but it’s not enough.”
Colston said $10 or $11 dollars an hour would better match cost of living in Louisville.
He said the city should also consider raising wages for tipped workers in the city, too.