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Louisville businesses oppose raising minimum wage

Businesses say it could lead to job loss

LOUISVILLE, Ky. (Sept. 10, 2014) — Not everyone in Louisville is in favor of increasing the minimum wage. Two days after five Democrats on the Louisville Metro Council proposed raising the minimum wage in increments to $10.10 by July 1, 2017, several businesses expressed concern that raising the minimum wage will adversely affect business and result in lost jobs.

Photo courtesy of Bureau of Engraving and Printing/U.S. Department of the Treasury
Photo courtesy of Bureau of Engraving and Printing/U.S. Department of the Treasury

Greater Louisville Inc. “opposes a minimum wage increase at the local level that would only affect Jefferson County, putting our local businesses at a distinct disadvantage while potentially costing jobs and creating a disincentive to hire young people and other first-time job seekers,” said Kent Oyler, the company’s president and CEO.

Dr. Paul Coomes, an expert in regional and urban economics research, speaking on behalf of Greater Louisville, said that increasing the minimum wage will result in job losses, mostly to teens, immigrants, seasonal workers and those recently released from the criminal justice system.

Coomes cited U.S Bureau of Labor Statistics and the Congressional Budget Office statistics that say half of minimum wage workers are 16 to 24 years old, are more likely to be never-married, working part-time, and employed in restaurants and bars, where tips supplement wages. Only 20 percent of low wage workers are in families with income below the federal poverty line, while 35 percent of low wage workers are in families with income of at least three times the 2016 federal poverty threshold, which is $24,100 for a family of four, says the CBO.

Another Louisville business, Mesa Foods, said that the proposed increase would cost the company an additional $500,000 to $1 million annually and could impact a planned $4 million expansion that would add 75 jobs.

Pete Hanekamp, Chairman of the Board for Packaging Unlimited said a minimum wage increase would put the company at a competitive disadvantage. “This will put us at risk of losing current business and detrimental to obtaining future business,” he said. “At times, we provide work to close to 1,000 people who live in the City of Louisville.”