Saturday, May 21, 2005
Copyright © Las Vegas Review-Journal

Panel OKs minimum wage plan

CARSON CITY -- Nevada's minimum wage would increase by $1.25 per hour under an amended bill approved unanimously on Friday by the Senate Commerce and Labor Committee.

Chairman Randolph Townsend, R-Reno, offered the amendment to Assembly Bill 87 to give voters another option on the November 2006 ballot.

As it stands, voters will decide only whether to back an AFL-CIO ballot question to increase the minimum wage by $1 per hour. Nevada's minimum wage is $5.15 per hour.

Unlike Townsend's bill, the AFL-CIO ballot question includes a provision to annually boost the minimum wage by the rate of inflation as determined by the Consumer Price Index. Townsend's plan does not provide for future adjustments for inflation.

Under Townsend's plan, voters would be asked in a separate ballot question whether they back his $1.25-per-hour increase, an increase that would make the minimum wage $6.40 per hour.

If voters pass Townsend's proposal and reject the AFL-CIO question, then the $6.40-per-hour minimum wage would remain in effect until a future Legislature changes it.

But if voters approve the AFL-CIO question and reject Townsend's plan, then wages would increase by $1 per hour to $6.15 per hour minimum initially and then rise with the rate of inflation each year. Assuming a 3 percent rate of inflation, the minimum wage would be $6.33 per hour in 2007 and $6.52 per hour in 2008.

Since the AFL-CIO proposal would be part of the constitution, it could not be changed without another vote of the people.

During the hearing, Sen. John Lee, a business owner, said he liked the Townsend plan better because it eliminates the Consumer Price Index as a factor.

But AFL-CIO state Secretary-Treasurer Danny Thompson said Townsend's proposal could mean workers are stuck at the same minimum wage without any pay increases for decades. Thompson noted the minimum wage has not been increased since 1997.

"I do not support it," Thompson said. "The reason the Consumer Price Index was put in ours was to ensure what is happening now does not happen again."

But Townsend contended his proposal will put more money in the hands of working people.

"The public deserves the right to say, `Hey, we can give more money to working people now, we don't have to reduce it by a quarter,' If they don't want to help working people more -- more than we want to help them -- they can vote against it."

Townsend also disputed that the Legislature would wait years to increase the minimum wage again. He predicted the time will come when there's a $20-per-hour minimum wage in Nevada.

The bill now goes to the Senate floor for a vote next week. Then, it would return to the Assembly for concurrence on the amendment.

During the hearing, Sen. John Lee, D-North Las Vegas, said he preferred Townsend's plan to the Assembly-passed version of the bill because it does not contain the inflation clause.

Sen. Maggie Carlton, D-Las Vegas, said she voted for the bill, although she opposes Townsend's changes because they leave out the annual inflation increases.

"We have to educate the voters there is no CPI (consumer price index factor) in the bill," she added. "I have faith they will choose the other one."

Carlton said the vote in the committee is an indication that the Senate, where Republicans hold a 12-9 majority, would not have backed the bill as passed by the Assembly. Democrats hold a 26-16 advantage in the Assembly.

Nevada uses the federal minimum wage as its state minimum wage. Congress put the $5.15 per hour minimum in effect in October 1997. Eleven states have minimums higher than the federal rate. Seven states have no minimum wage laws. Two states, Kansas and Ohio, have rates lower than the federal minimum. Kansas' minimum wage is $2.65 per hour.

Although Thompson originally estimated 50,000 people in Nevada work for the minimum wage, the study his organization cited actually found only 8,000 workers in the state receive $5.15 per hour. But 50,000 workers earn between $5.15 per hour and $6.15 per hour and would receive pay increases if the minimum wage is raised.