Panel deletes inflation proofing from minimum wage

Posted: Tuesday, May 06, 2003

JUNEAU (AP) The minimum wage would not have to keep up with inflation under a bill that passed the House Finance Committee on Monday.

The bill would change a law legislators passed last year that boosted the minimum wage from $5.65 to $7.15 an hour and called for it to rise in the future with the consumer price index. That bill was intended to keep a similar citizens initiative off the ballot.

Rep. Norman Rokeberg, R-Anchorage, argued last year that the minimum wage should not automatically go up with inflation, and he introduced the bill this year to change the law.

As a public policy, it's bad because it's inflationary, it decreases jobs and it doesn't target those people who are in poverty,'' Rokeberg said.

He said automatic inflation-proofing will hurt small businesses, which will respond by using more technology and hiring fewer workers. He argues that most minimum wage workers are either in the hospitality industry and receive tips or in the seafood industry and receive overtime pay.

Rep. John Harris, R-Valdez, joined minority Democrats on the Finance Committee in opposing the bill.

Harris said since the law just changed in January, it's too soon to know if the inflation-proofing requirement will be a problem for businesses.

And he said government has a role to play in ensuring workers are paid a fair wage.

Business is always going to do what's best for business. If business could get away with it, they would pay their people nothing,'' Harris said. That's just sort of the nature of the beast.''

Rep. Eric Croft, D-Anchorage, said it would be better for businesses if the state pushes the wage up in small increments each year with inflation, rather than waiting several years and then imposing a big wage hike.

The Finance Committee voted 7-4 to allow the bill to move to the Rules Committee, where it will be scheduled for a floor vote.

Voting yes'' were Reps. Mike Chenault, R-Nikiski; Richard Foster, D-Nome; Mike Hawker, R-Anchorage; Kevin Meyer, R-Anchorage; Bill Stoltze, R-Anchorage; Jim Whitaker, R-Fairbanks; and Bill Williams, R-Saxman. Voting no'' were Harris; Croft; Reggie Joule, D-Kotzebue; and Carl Moses, D-Unalaska.

The measure is House Bill 199.

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