How is Lexington Addressing Wage Growth for Low-Wage Workers?
Quick Summary
Despite studies showing a living wage in Kentucky is $10.10/hour, the cost of living in Lexington is higher. Recent studies have shown that workers making less than $30,000/ year (~$15.00/hr) are finding it increasingly difficult to afford to live in Lexington.
Lexington attempted to raise the minimum wage to $10.10/hr, from $7.25, in 2015. The Kentucky Supreme Court struck down the ordinance in 2016, ruling that Kentucky cities do not have the authority to raise the minimum wage.
As of 2014, there were around 13,000 households living below the poverty line in Lexington. While Lexington is experiencing an economic boom in the tech and service sectors, wage stagnation in low wage jobs has left thousands of workers behind.
The city of Lexington has several programs, including partnerships with Commerce Lexington and KCTCS, that promote worker education and retraining, and incentivize high quality job creation. While essential in helping workers attain higher paying jobs and encouraging quality job creation in the city, they don’t directly address the problems workers in low wage jobs face.
Why does this matter?
Low wage jobs often do not offer health or retirement benefits, paid sick leave, parental leave, and often have unpredictable schedules. All of these factors make low-wage jobs stressful and do not help create stability and security in a worker’s life.
Lexington loses tax revenue when residents’ purchasing power is limited by a low income and additional taxes are spent when low-wage workers must depend on public assistance programs.
As Lexington has attracted new, advanced industries, their higher paid workers have caused housing prices to increase, pushing low wage workers into cheap, unsafe, substandard housing - or out of the city entirely.
Increased utilization of substandard housing has a negative effect on entire neighborhood health.
Women, women-led households, minorities, and immigrants are statistically more often employed in low-wage jobs.
What is the context?
From 1998-2011, wages in already high earning sectors increased at more than double the rate of wages in low paying sectors. Compounding this is the loss of manufacturing jobs - a 54% decline - forcing many to lower wages as they seek replacement employment.
Dozens of smaller cities and counties have also enacted higher wage standards. Statistics show that higher minimum wages do not contribute to job loss - job growth is slightly faster in states that raised their wage floors and unemployment fell a bit more.
Employment policy studies recommend encouraging and incentivizing High Road Workplaces. These employers implement paid sick days, family medical leave insurance, diverse hiring, fair wages, retirement plans and other workplace practices and policies that attract and retain productive, loyal employees.
How can I get involved?
Talk with your family, friends, and neighbors about how wages effect their lives.
Talk with your city council representative about this issue.
Read more about Lexington policy and what other communities are doing to address this issue.
Support businesses that promote fair labor practices.
Reach out to organizations and programs that advocate for different positions for low-wage worker wage growth like Commerce Lexington, Kentuckians for the Commonwealth, Kentucky Center for Economic Policy, and the Lexington Jobs Fund.