Bill to boost minimum wage to $9 is part of legislative package to help working families

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Posted: Friday, January 17, 2014 12:00 am | Updated: 11:04 am, Tue Mar 25, 2014.

LINCOLN — Saying the economy has left too many Nebraska families behind, a group of senators called Thursday for raising the state minimum wage.

Legislative Bill 943 would bump the state's minimum wage to $9 an hour, up from the current $7.25 an hour, in three steps over the next three years.

The measure is part of a legislative package aimed at helping working families. Other parts would increase the state earned income tax credit, require paid sick leave for workers and create a paid family medical leave program.

State Sen. Jeremy Nordquist of Omaha said he introduced the minimum wage bill because Nebraska's middle class is shrinking. Recent census figures show that median household income has fallen over the last decade.

“The ability to earn a decent living should be obtainable to all Nebraskans, and hard work should certainly pay,” he said.

One business group said raising the state minimum wage could force employers to cut jobs, and two others said they prefer that the state minimum wage match the federal rate.

LB 943 would not raise the Nebraska minimum wage as much as the federal increase being proposed by congressional Democrats and President Barack Obama. They are proposing to go to $10.10 an hour, to be implemented in three steps over two years.

Nor would the bill set Nebraska's minimum wage as high as those already adopted by some other states. The highest is $9.32 an hour in Washington state.

Two of Nebraska's neighbors already have higher state minimum wages: Colorado increased its to $8 an hour this year, and Missouri adopted a $7.50 minimum.

As of this year, 21 states and the District of Columbia have minimum wages higher than Nebraska's. Several states are expected to consider increases this year, through legislation or ballot initiatives. That includes Iowa lawmakers, who are expected to consider increasing their state's $7.25 an hour minimum.

Nordquist said those states' experiences show that fears of economic disruptions caused by raising minimum wages are overblown. Instead, he said, higher pay for low-income workers would benefit Nebraska's economy by lifting wages broadly and putting money in consumers' pockets.

“Every dollar will be spent right back in the economy,” he said.

Nordquist also said employers would benefit from lower turnover and greater employee productivity.

But Bob Hallstrom, a lobbyist for the Nebraska Federation of Independent Business, said studies show that raising the minimum wage hurts employment and the greatest impact of job cuts is on the lowest-paid employees.

“At some point, small-business owners especially have to decide what to cut,” he said.

Representatives from two other business groups said they favor having the state minimum wage equal the federal level. Ron Sedlacek, with the Nebraska Chamber of Commerce and Industry, and Jim Otto, with the Nebraska Retail Federation, said they have not opposed increases in the state minimum when the federal minimum increases.

Becky Gould, with the nonprofit, nonpartisan Nebraska Appleseed Center for Law in the Public Interest, said the legislative package represents a step toward rebuilding Nebraska's middle class.

“These common-sense policies ensure that Nebraska will be a place where hard work pays and restores our workers' ability to make a decent living and provide security to their families,” she said.

According to the Bureau of Labor Statistics, an estimated 3.6 million workers in 2012 were paid at or below the federal minimum wage, including about 32,000 Nebraska workers.

Nebraska ranked 13th-highest for the percentage of hourly workers making at or below minimum wage and second-highest among neighboring states.

Sens. Annette Dubas of Fullerton and Danielle Conrad of Lincoln are sponsoring the other parts of the package:

» Nebraska workers would get up to six weeks' worth of paid leave to care for a new baby, a sick spouse or an elderly parent under LB 955, introduced by Dubas. Payment for the leave time would come out of a statewide pool, funded with a new payroll tax.

» The state earned income tax credit would increase to 13percent of the federal earned income tax credit, up from the current 10 percent, under LB956, introduced by Conrad. The tax credits reduce the tax bill or provide refunds for low-income working families.

» Conrad also plans to introduce a bill requiring employers to offer paid sick leave to certain employees. She said about 43 percent of Nebraskans lack paid sick leave.

In addition, Sen. Steve Lathrop of Omaha introduced LB 947, which would raise the minimum wage for workers who get tips to 70 percent of the minimum for other workers.

The federal minimum wage applies to businesses with gross incomes of more than $500,000 a year, those that do business across state lines, hospitals, schools and some others. The state minimum applies to those with four or more employees.

Nebraska's minimum wage was last increased in 2009, at the same time the federal minimum went up. Legislation on both levels bumped the minimum up from $5.15 an hour in three steps over three years.

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