Kentucky Minimum Wage to Increase in 2024, Will Be Even Higher for Certain Workers

Kentucky is one of the states that follows the federal minimum wage of $7.25 per hour, which has not changed since 2009. However, some workers in Kentucky will see a higher minimum wage in 2024, thanks to a bill passed by the state legislature in 2023.

What is the bill and who does it affect?

The bill, known as HB 34, was sponsored by Representative Attica Scott and co-sponsored by 18 other lawmakers. It aims to gradually increase the minimum wage in Kentucky to $15 per hour by 2028, with annual increments starting from July 1, 2022.

However, the bill does not apply to all workers in Kentucky. It only covers workers who are employed by state or local governments, or by businesses that have contracts with state or local governments. This means that workers in the private sector, who make up the majority of the workforce in Kentucky, will not benefit from the bill unless the federal minimum wage is raised or another bill is passed to cover them.

The bill also affects tipped workers, who are currently paid $2.13 per hour, as long as they receive at least $30 per month in tips. Under the bill, the tipped minimum wage will increase to $2.13 per hour on the effective date of the bill, to $3.05 per hour on July 1, 2022, to $3.95 per hour on July 1, 2023, and to $4.90 per hour on July 1, 2024. After that, the tipped minimum wage will be 70% of the regular minimum wage.

Why was the bill passed and what are the expected impacts?

The supporters of the bill argued that the current minimum wage is not enough to cover the basic living expenses of workers, especially in the wake of the COVID-19 pandemic, which has caused economic hardship and increased inequality. They claimed that raising the minimum wage would boost consumer spending, reduce poverty, and improve the quality of life for workers and their families.

The opponents of the bill, on the other hand, warned that increasing the minimum wage would have negative consequences for businesses, especially small and medium-sized enterprises, which may have to cut jobs, hours, or benefits to cope with the higher labor costs. They also said that raising the minimum wage would hurt the competitiveness of Kentucky in attracting and retaining businesses and investments.

The actual impacts of the bill are hard to predict, as they depend on various factors, such as the inflation rate, the labor market conditions, and the responses of employers and workers. Some studies have found that moderate increases in the minimum wage have little or no effect on employment, while others have found that large increases in the minimum wage can reduce employment, especially for low-skilled and young workers. The effects of the bill may also vary by industry, region, and demographic group.

Conclusion

In summary, Kentucky will see a higher minimum wage for certain workers in 2024, as a result of a bill passed by the state legislature in 2023. The bill will gradually raise the minimum wage to $15 per hour by 2028 for workers who are employed by state or local governments, or by businesses that have contracts with state or local governments. The bill will also increase the tipped minimum wage to $4.90 per hour by 2024, and then to 70% of the regular minimum wage. The bill aims to improve the living standards of workers and their families, but it may also have unintended consequences for businesses and the economy. The actual impacts of the bill will depend on how it interacts with other factors, such as inflation, labor market conditions, and employer and worker behavior.

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