Economists, business owners weigh in on Louisville minimum wage - wave3.com-Louisville News, Weather & Sports

Economists, business owners weigh in on Louisville minimum wage proposal

Claudia DeLatorre (Source: Michael Williams, WAVE 3 News) Claudia DeLatorre (Source: Michael Williams, WAVE 3 News)
Professor Jose Fernandez (Source: Michael Williams, WAVE 3 News) Professor Jose Fernandez (Source: Michael Williams, WAVE 3 News)

LOUISVILLE, KY (WAVE) - The Louisville Metro Council could be on the brink of raising the minimum wage from $7.25 to $10.10 an hour.

This week Jefferson County Attorney Mike O'Connell gave the council the green light to pursue increasing hourly pay. O'Connell told council members they have the authority to establish a wage rate separate from the rest of the state. If passed, the proposal would be phased in over three years. However, opponents claim increasing wages will negatively affect small businesses.

When Cake Flour owner Claudia DeLatorre drafted her recipe for success, she knew paying her employees minimum wage wasn't going to cut it.

"We always hire above the minimum wage because we'd like to keep our employees and attract qualified, skilled talent," DeLatorre said.

DeLatorre agrees with a group of metro council democrats who announced they're moving forward with a minimum wage increase proposal.

Council members Attica Scott, Barbara Shanklin, and David James are working on an ordinance that would gradually increase the minimum wage to $10.10 per hour over a three-year period.

However, some economists question whether raising hourly pay will hurt those it's intended to help.

"Although you're increasing wages from $7.25 to $10.10 there are already people who are at ten dollars an hour," UofL Economics Professor Jose Fernandez said.

Fernandez said minimum wage compression could happen as a result - hurting instead of helping the workforce.

"You could have more people who are probably not working in as skilled a job who are making the same amount as they are. Are they better off or worse off from doing this? You tend to compress wages toward the bottom when you increase minimum wages," Fernandez said.

National reports released from the Center for Economic and Policy Research back DeLatorre's opinion that raising a wage spurs growth in spending among the working class.

"When there's more money in your employee's pocket they're going to be able to pay their bills and spend what they earn," DeLatorre said.

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