Idaho wage increase proposed
Democratic State Sen. Michelle Stennett spoke before the Senate State Affairs Committee Feb.10, introducing a bill that would raise Idaho’s current minimum wage of $7.25 to $8.50 by the middle of the summer.
If the bill passes, wages will increase again to $9.75 the following year, according to Boise Weekly.
During his State of the Union Address in January, President Barack Obama called for a raise in the nation’s minimum wage, introducing a bill that would increase it to $10.10.
Obama spoke about the company Costco and its belief in giving high wages to its employees in order to escalate productivity and cut down turnover.
“This will help families,” President Obama said. “It will give businesses customers with more money to spend. It doesn’t involve any new bureaucratic program. So join the rest of the country. Say yes. Give America a raise.”
Dr. Joseph J. Sabia, a widely known economics professor at San Diego State University, has researched the effects of minimum-wage hiking, and he notes that it is not always the best course of action in situations of weak economic growth.
He released a study in January that focused on the last three federal minimum-wage hikes and stated minimum-wage increases from the course of 1990 — 2010.
He discovered that over the last 20 years, for every 10 percent increase in minimum wage as many as 2.3 percent of less-educated young adults have lost their employment, according to the Employment Policies Institute.
Despite the minimum wage increases, for more than five years the unemployment rate for young adults has been above 20 percent, and supports the idea that a minimum-wage hike hurts more than helps. His research urges that policy makers in the federal, state and city levels consider minimum-wage hikes carefully.
Local business general manager Spencer Price of Jimmy Johns said he does not feel the minimum wage will affect the hiring process.
He said that if there were an increase in wages, he would create higher expectations for hired employees to work harder to make up for the costs.
Art Morales, general manager of Fat Cats, said the real effect of the minimum wage hike would mostly be moved onto the consumers because prices would go up.
He said a wage increase is good for the economy and the area of Rexburg because more people can see their wages increase in their household, which means they can afford to stay in town longer and generate more business for Fat Cats.
According to the BYU-Idaho website, the current average cost of living for enrolled LDS single students is around $4,275 to $5,975 per semester.
These estimated costs account for books, rent and tuition. However, they do not account for the costs of vehicle maintenance, health insurance and other living expenses.
Morales said the employment turnover rate is high in Rexburg, and that he pays his employees higher wages.
He said 50 percent of his staff is being paid above the minimum wage, and of that group, 20 percent are paid between $8 and $10 an hour.
“We pay our college kids better,” Morales said. “It gives them a better perspective on staying in Rexburg when they are off-track so they get paid good, and we look at it as if we take care of them, they’ll take care of us. … Therefore, it’s worth it to us to train and pay them good so that they’ll turn into long-term, instead of three-month, employees.”
Sen. Elliot Werk said he supported the new bill proposed by Democratic State Sen. Michelle Stennet two weeks ago, because he believes in higher wages for people in Idaho who are struggling to make ends meet.
Werk said that families are struggling and that Idaho is 50th in the nation for overall wages.
“We believe — Idaho Democrats believe — it’s time to offer a pay raise to our people: to the people who really need and are struggling right now.”
Kristen Salyes, a senior studying history, is an employee at the Wal-Mart in Rexburg, said she thinks a minimum hike is a good thing for student employees because they need the money, considering the prices here in Rexburg are very high.
“I have mixed feelings about minimum wage because it would be nice to be able to make more, but … companies have to start paying more and so they may have to hike up their prices in order to compensate for that,” said John Kofoed, a sophomore at BYU-Idaho studying elementary education.
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