Apr 10, 2014 7:04 PM by Kari Beal
The House Committee on Labor and Industrial Relations rejected bills that would have set a rate higher than the current minimum wage of $7.25. House bill 356 proposed to increase the wage to $8.25. House bill 382 took it a step higher at $10.10 an hour. Supporters argued a wage hike would help lift more people from poverty levels, in a state that is among the poorest in the nation.
UL Department Head in the School of Business Administration said minimum wage hikes end up re-distributing where money is put.
"If they are effective, if they really put wages above what the market would establish, it tends to reallocate earnings from those at the very bottom to those a little higher up," Dr. Cary Heath said.
In turn, Dr. Heath explained employers may end up hiring less minimum wage employees and this could increase unemployment rates.
"So people on the very bottom of the scale are hurt," Heath said.
Louisiana is one of five states in the U.S. that has no minimum wage law. We follow the national minimum wage rate. Supporters of the bills said when minimum wages are increased people can spend more money, and this boosts the economy.
One local business owner who disagrees with minimum wage increases said employees should earn the money they work for.
"We work more on merit system. If you do a good job you get a raise. We don't keep anyone at minimum wage because if you are good enough to work here you are good enough to make more than minimum wage," Vice President of Old Tyme Grocery Ross Murphree said.
The senate has two bills pending committee that would raise the minimum wage. SB 123 asks voters to approve a constitutional amendment that would require businesses with 50 or more employees to have a minimum wage $9.50. SB 46 would raise the minimum wage to $10 an hour.