House votes to change minimum wage law

Posted: Sunday, May 18, 2003

JUNEAU (AP) Lawmakers in the House passed a bill Friday that would do away with inflation adjustments in Alaska's minimum wage.

The House voted 24-14 to repeal the automatic adjustments for inflation. The bill does not affect the $1.50 minimum wage increase to $7.15 an hour passed by lawmakers last year under which a full-time worker makes about $14,000 a year.

Alaska is one of only three states that has the automatic adjustments for inflation in its minimum wage, said bill sponsor Rep. Norman Rokeberg, R-Anchorage.

''Increases in minimum wage should not be automatic,'' Rokeberg said, during debate on the House floor. ''A business that might be failing ... every January will be required to increase their wages whether they can afford it or not.''

Forced wage hikes lead to entry-level workers having their benefits cut and losing their jobs, Rokeberg said. The impact of the new minimum wage formula already is being felt in Anchorage, he said, with the closing of one restaurant and the decision by another chain not to open a second restaurant.

Rep. Harry Crawford, D-Anchorage, argued that automatic adjustments for inflation actually help employers. Instead of every five or six years being hit with a large wage hike, wages are gradually increased under the formula, he said.

Alaska's formula calls for annually adjusting the minimum wage by the Consumer Price Index, or increasing it by $1 over the federal minimum wage, whichever is greater.

''I think that this is the right way to increase the minimum wage,'' he said.

The 300-member Alaska Cabaret, Hotel, Restaurant and Retailers Association supports HB199 because the automatic wage adjustments are difficult for struggling businesses, particularly those with many entry-level employees, said president Glenn Brady, who also is president of the Silver Gulch Brewing Co. in Fairbanks.

But Alaska AFL-CIO lobbyist Don Etheridge said lawmakers aren't giving the minimum wage formula a chance to work. If the bill becomes law, workers will not realize even their first small adjustment of 14 cents an hour in January, he said.

In 2001, Alaska AFL-CIO affiliates gathered over 50,000 petition signatures to get the minimum wage issue on the ballot. Etheridge said lawmakers last year kept it from being decided by the public by approving the increase in the minimum wage and now are trying to undo it.

''That is the part that really bothers us the worse,'' Etheridge said.

The bill still has to pass the Senate.

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