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What would a $15 minimum wage mean for Utah?

The Associated Press [May-30-2014]

(Associated Press, File)



Estimated read time: 6-7 minutes

SALT LAKE CITY — The federal minimum wage has been locked at $7.25 since 2009, and Utah is one of 20 states that has no higher requirement. Both locally and nationally, Democrats have for years called for a higher minimum wage while Republicans have pushed back because of business concerns.

But with Democratic control of the U.S. House, Senate and presidency, the battle for a higher minimum wage has come front and center once again. And here in Utah, two Democratic legislators sponsored their own bills they hope will increase the minimum wage across the Beehive State, regardless of what happens in Washington.

Representatives Clare Collard, D-Magna, and Ashlee Matthews, D-West Jordan, both in their first year in the Utah House, sponsored legislation that comes at the minimum wage question from different angles. Collard's bill, HB284, would gradually raise the state's minimum wage until it hits $15 an hour by July 1, 2026.

A $15 hourly wage has become a standard starting point for many Democrats nationwide and is President Joe Biden's target as he negotiates a new coronavirus relief package with a minimum wage increase included. In November, Florida became the latest state to greenlight a gradual minimum wage increase to $15.

Matthews aims for a lower target but also ties the Utah minimum wage to inflation and ensures steady increases. Her "Livable Wage Amendments," which is not numbered yet, would raise the minimum wage in urban Utah counties to $10.75 per hour by 2028; in rural counties, it would be $9.25. After 2028, the Department of Workforce Services would adjust the rate annually for inflation.

"This is long overdue," said Matthews in an emailed statement from the House Democratic Caucus. "We need a sophisticated approach to regulating wages that accounts for where you live in our state. Many Utahns are not able to pay their bills, pay for rent, even as they work multiple jobs. Having a job should lift you out of poverty, not keep you in it."

Matthews' bill deals with one common criticism of nationwide minimum wage legislation — that the cost of living varies widely in different states and areas, and the minimum wage should reflect that. Under her proposal, for instance, the minimum wage would be slightly higher in Salt Lake City than in Panguitch.

'Beyond ridiculous'

Local business owner Kirk Bengtzen said Matthews' bill "makes a lot more sense" than an increase to $15. Bengtzen owns Twist, a popular downtown Salt Lake City bar, and used to own local car dealerships. He told KSL.com that an increase to $15 would mean layoffs at his companies, even if it were done gradually.

For example, Bengtzen said Twist usually has about five barbacks, employees who assist bartenders and servers with cleaning and prep work, and has hired several more to help with the extra pandemic-related tasks like sanitizing tables between parties. Right now, his barbacks make slightly more than minimum wage. But there's "absolutely no way," Bengtzen said, he'd be able to keep that many at $15 an hour.

Bengtzen said he currently pays his experienced cooks about $15 an hour. "And I get really good help," he said. Increasing the entry-level wage, then, would require him to pay his cooks and skilled employees a lot more.

"Because if I'm hiring an entry person at $15 an hour, why in the world would a cook work for me for $15 an hour? It just has this ripple effect that, unfortunately, I don't think Biden and his team really cares about."

The pandemic, and the loss of business that came with it, makes this a particularly bad time for a minimum wage increase, Bengtzen argues. But he feels it would be excessive regardless. "To more than double the minimum wage is just, I think, beyond ridiculous," he said.

Collard said she's heard some of those same concerns from business owners in her district. She tells them that, according to studies she's consulted, workers earning more money pour that extra cash back into the economy.

"These people are not saving the money. They're buying goods and services, they're paying rent, they're buying gas." The higher wages, she added, make people less reliant on social services, like food stamps.

"But ultimately, I just don't think anyone working full time should be living in poverty," Collard said.

There's also a misconception, she said, that minimum-wage workers are all high school students working for "pocket money."

"That's just not entirely the case," Collard said, noting that more than half are over 20 years old and almost three-fifths are women, many with families. "So this can raise families out of poverty — I mean, thousands of families."

But Bengtzen said his own teens, currently saving up for a car, would be affected if the minimum wage was higher. His daughter is looking forward to bagging groceries when she turns 16, and his son found a minimum-wage job with a friend helping customize luxury vehicles.

"There's no way they would even consider having a position (for him) if it was over $8 or $9 an hour," Bengtzen said.

Many families are in a situation where they have teens that work not for extra money, but out of necessity. "Nobody's going to hire a 16- or 17-year-old kid for $15 an hour, or even $12 an hour. They're just not going to do it."

'A great start'

Lauren Simpson, policy director at the left-leaning Alliance for a Better Utah, said she doesn't believe minimum wage increases will lead to widespread layoffs. "From the data we've seen, I don't think that necessarily checks out."

Of course, there's always an argument to be made that new regulations will decrease a company's profits.

"At some point, you have to draw a line and decide that we value the well-being of workers, the well-being of the people," Simpson said. "That's what I think the minimum wage is really out to do — it's a protection for people. So hopefully, if businesses are paying people fairly right now, paying people a fair market rate for their work, this shouldn't have too much of an impact on them."

Simpson said Better Utah supports Collard's bill, and although it's not "perfect," it's a "great start."

"There's polling that shows that a majority of Utahns support a minimum wage increase, so hopefully lawmakers will listen," she said.

While both Collard and Simpson support a $15 minimum wage, they agreed that any increase would be a great starting point.

"Is $15 a magic number? Not necessarily," Simpson said. "At the end of the day, it's ensuring that people are able to make a living wage, to not just survive but thrive in Utah."

Collard said she and Matthews are "both trying to accomplish the same thing" with their different minimum wage bills.

"Everything's on the table," she said. "If we have to come up with a compromise, sure. Everything is about compromise. We really just want to accomplish the same goal. ... We're both supportive of each other's bills."

According to a Wednesday article in The Wall Street Journal, economists are "divided" about the impact of a $15 minimum wage. Most agree, though, that it would be a bigger burden on rural states with a low cost of living. And it would disproportionately impact industries that already took a big hit during the pandemic, like leisure and hospitality.

In 2019, a study from the nonpartisan Congressional Budget Office found that raising the minimum wage to $15 by 2025 could cost 1.3 million American jobs — and also lift 1.3 million Americans out of poverty.

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