Kansas City Council moves closer to minimum wage hike

Kansas City is one vote away from becoming the first city in Missouri to try to raise the minimum wage above the state-mandated level of $7.65 per hour.

The Kansas City Council took a procedural vote Thursday that sets the table for next Thursday’s final decision on a higher minimum wage. But the latest proposal is not as dramatic as a previous version that called for Kansas City to join a handful of other cities nationwide with an increase to $15 per hour by 2020.

“The goal in my opinion is to do some justice to those who need it, without doing damage to (business) people who have done no wrong,” Mayor Sly James told his colleagues as he unveiled a more modest wage increase schedule.

For two months, the City Council has debated the merits of a grass-roots petition initiative that seeks to raise the minimum wage in the city to $10 per hour by Sept. 1 and to $15 per hour by 2020. Advocates for low-wage workers say an increase is essential to lift people out of poverty, while fast-food and other retail owners vow to fight the move in court, saying such a drastic change will only drive jobs and businesses out of the city.

Among key elements of the revised plan the council discussed Thursday:

▪ The minimum wage would rise to $8.50 per hour on Aug. 24; to $9.15 per hour by Jan. 1, 2017; and then in 65-cent increments annually to $13 per hour by 2023.

▪ The wage would apply to all employers with more than 15 employees and more than $500,000 in annual gross revenue, although James said that definition of small business may change.

▪ Failure to comply could result in Municipal Court prosecution with a maximum fine of $1,000.

Council members emphasized this proposal will likely be tweaked again before a final vote next Thursday.

Proponents of a wage increase said it’s too soon to know whether this version would be acceptable but indicated they would prefer a more significant wage raise, and sooner than 2023.

“We will continue to say we would like a $15-per-hour wage. That’s still below a living wage for Kansas City, for anybody but a single adult,” said Donna Simon, pastor of St. Mark Hope and Peace Lutheran Church, which houses the Stand Up KC worker advocacy group that has pushed the minimum-wage increase.

“And 2023 is a long way away. People are hungry now.”

Dana Wittman, a Subway employee who has worked in fast food for 20 years, agreed. She said she makes $8.75 per hour and it’s simply not enough to live on.

“I would say we were hoping for something more definitive,” she said of the council’s latest version. “That’s not going to help me because I’m already above that.”

Simon, Wittman and other worker advocates will be participating in a bit of political theater for the next week, staging a “rolling fast,” with people fasting for 24 hours and groups rotating to spend day and night under a canopy on the south side of City Hall until next Thursday’s vote.

Meanwhile, some opponents insist Kansas City has no legal authority to change the wage above the state-set minimum, and say they will go to court to get the new wage thrown out if the council insists on taking that vote.

One opponent Thursday said business owners can accept a 25-cent wage increase in August, and probably an increase to $9 per hour by 2017, but anything beyond that is projecting too far into the future.

“Nobody knows what the economy will do,” said Jason Pryor, government affairs chairman for the Greater Kansas City Restaurant Association, adding that restaurant, hotel and other business advocates will fight mandated increases beyond 2017.

As the council weighed its options Thursday, it was clear the way forward is full of potential pitfalls.

Studies don’t agree on the impact of minimum-wage increases, said Scott Helm of the Henry W. Bloch School of Management at the University of Missouri-Kansas City. Helm has moderated weekly discussions since June 1 between opposing sides in the debate.

“You’ve been handed a whole bunch of rough measures to make a very difficult decision,” he told the council, adding that it’s too soon to know the long-term effects in places like Seattle and San Francisco that are only now ramping up their minimum wages.

William Greiner, chief investment strategist of Mariner Holdings, told the council there’s no doubt that the purchasing power of the minimum wage has declined since its peak in 1980.

Those making minimum wage have definitely lost ground relative to average wage earners since then, he said, and a gradual increase to $10 per hour over the next few years is very much justified.

But a more drastic increase, he warned, could have more adverse effects, including driving up youth unemployment.

Councilman Ed Ford acknowledged that any council action may prompt a lawsuit and said he personally has doubts that the council can raise the city’s wage above the state minimum.

While the city may be able to adopt a new minimum wage before Aug. 28 under state legislation that has yet to be signed into law, Ford questioned whether it can call for gradual increases past that date.

Meanwhile, Councilman Jim Glover said he thinks the city can implement a gradual increase over time as long as it enacts its ordinance before Aug. 28.

Ford said many other questions remain about the current council proposal, such as how it would be enforced. If a business fails to pay the new minimum wage, he asked, who will the city prosecute in municipal court, especially if a company is based out of town?

James said Kansas City could look to how Seattle is starting to enforce its higher minimum wage, but he acknowledged this is uncharted territory.

“Everyone is kind of learning this on the fly,” James said.

This story was originally published July 9, 2015 at 3:58 PM with the headline "Kansas City Council moves closer to minimum wage hike."