LAKE CHARLES, LA. (KVHP) - The State Senate killed a bill that would have raised the state minimum wage from the federal minimum of $7.25 to $8.50 over a two-year span. This means that Louisiana will remain one of five states that have not set a state minimum wage for now.
While this move may upset workers, Richard B. Smith, vice president of business and workforce development at SWLA Economic Development Alliance, as well as the politicians who voted against it, say that the bill would have done more harm than good.
"If you have an increase in minimum wage, it's not just those minimum wage earners that it impacts." says Smith, "It impacts every wage earner in your workforce because if you go from $7.25 an hour to $8.50 an hour, that's an over 14% increase in pay. Well, you've got people on up the pay scale making whatever number of dollars an hour, and they are going to be sitting here - you just gave this person, who has very little skill to offer you 14% increase in pay. I'm your producer in whatever we do, what are you going to do for me?"
Smith says that minimum wage jobs are not set up to make livable wages, but instead for those who want to build a skill set, which helps build a path to earning more.
"Minimum wage does not provide a living. Minimum wage is 'we won't pay you less than that' while you're on the job gaining skills and experience because you've got to get skills and experience before you earn the next wage, which is, you know, above minimum. Starts moving you towards a living wage. Jumping in the workforce saying 'give me $20 an hour' nobody can do that.If you do, then the loaf of bread is $20. Everything has to balance in a free market society."
Smith says that there is plenty of room to grow in the Southwest Louisiana economy, stating that $43.5 billion is being made in industrial expansion in the area combined with one of the lowest unemployment rates in the state at around 3.5%.
According to Smith, "$7.25 is not a living wage, no. I mean, people are living on it, but they're not, they're not thriving on it.What you want them to do is at $7.25 be like 'I'm getting experience, I'm gaining some skills, and I want to move on to my next job. I want to look for that next job, I want to build my career in an upward fashion."
According to Labor Market Statistic's Quarterly Census of Employment and Wages Program, workers in the Lake Charles metropolitan area make up almost 17% of the Louisiana workforce and earn almost $3 more than the average worker hourly and almost $5,000 more annually.