Economists and locals discuss the local impact of a minimum raise hike in Bowling Green

BOWLING GREEN, Ky. – Some pandemic benefits are about to expire by the end of the week.

Congress is trying to pass another COVID relief bill which includes a national minimum wage increase to $15 an hour.

Minimum wage currently in the state is $7.25 an hour.

Working 40 hours a week, before taxes, that equals $1,160 per month or just over $15,000 a year.

The price to rent a small apartment in Bowling Green can be around $600-$1,400 per month.

So, even a person living on their own making minimum wage in a cheap apartment can struggle to make ends meet, much less adding a family, medical bills, or even car trouble to the mix.

The COVID relief bill that has already passed in the House and is in the Senate would raise minimum wage to $15 an hour.

“It’s the ones that are working the morning shifts. It’s the people that are working at Target as their full-time job and then they go leave Target to go to another full time job to make ends meet.  The minimum wage isn’t increasing for high school students, it’s to give those people a standard of living that is acceptable,” said resident Matthew Irazarry.

Low paying jobs are often starter jobs, for people straight out of college or high school, when people are starting families.

But local economist and WKU professor, Dennis Wilson, said a required hike in pay is going to cost entry level workers their jobs.

“Unskilled are low skilled new entries into the workforce are most harmed by such increases in these minimum wage, even though that’s who it’s suggested it’s going to help. It turns out that those people that are hiring them are less interested in hiring people if they have to pay them more and so they’re more likely to attempt to automate. So, with these types of minimum wage suggestions coming down the pipeline, you’ve already seen what we would typically think as menial jobs, working at a fast-food restaurant, they become much more automated. The kiosk at which you self-order limits the number of people that they’re hiring,” said Wilson.

According to local economist and WKU assistant professor, Sebastian Lequizamon, if a company is able to keep all of their employees following minimum wage rising, employees will likely see a decline in benefits.

“They’re going to try to reduce, they are going to try to make their profits to be able to provide the service or good that they are providing. They are going to have to cut cost somewhere. So, in that sense, if it is such a significant raise, then they are going to be forced to either start laying people off so that they can cut cost, they can reduce the hours or what we have been seeing is that when those employment affects are not negative what they end up doing is reducing the fringe benefits that people get. So reducing the amount of help that they get with the healthcare, reducing the amount of help that they may get through say retirement contributions or something like that. So even when you don’t see those negative employment effects, they have to cut cost somewhere,” said Lequizamon.

One local business owner, Diane Taylor, wants to get her employees paid $15 an hour, but during the pandemic, that just isn’t possible for her right now.

“I think every day about what I would do if I suddenly had to start paying my employees a whole lot more than what I am right now and I think that my first step would be, A.  I’d have to start raising my prices and I would probably have to cut their hours some, which is not something that we want to do either,” said Taylor.

Taylor says she would love to see minimum wage raise increase eventually nationwide, but this isn’t a good time for local businesses.

With larger cities having already raised minimum wage, the impact locally will be different than in cities like Los Angeles and San Francisco according to Wilson.

The vote on the COVID-19 relief bill which includes the minimum wage increase is expected to come by the end of the week, before benefits for COVID relief end, but some Senators have said they refuse to approve the bill with the minimum wage increase included.