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Economy & Business | Legislature

Labor/business divide revealed as minimum wage debate moves to the state Senate

The fight over raising Nevada’s minimum wage is moving to the state Senate, where Democrats are pushing for a more moderate increase to the wage than their Assembly counterparts.

Democratic Sen. Yvanna Cancela and Senate Majority Leader Aaron Ford on Monday gave the first presentation of legislation (SB106) that would raise the wage floor to $12 or $11 an hour (depending on whether or not an employer offers health insurance) over a period of five years through incremental $0.75 increases, starting in 2018.

Moves to raise the wage from the state’s current level of $7.25 or $8.25 an hour have become a major partisan battle of the three-week-old legislative session, with Democrats attempting to find a way to raise the wage without holding the required two-thirds majority to override a veto by Republican Gov. Brian Sandoval, who has expressed skepticism over raising the wage.

Nevertheless, Ford and other Democrats have pledged to forge ahead with a wage increase in 2017, calling the $12 increase “a very good compromise” that would not overly burden businesses.

“It’s a fair balance between allowing small businesses and businesses of any size to continue to grow while allowing employees to earn a fair wage,” he said.

Most economic data shows that a minimum wage increase in Nevada would have an outsized impact on Nevada workers because the state’s economy is clustered around low-wage service industries. Though only 44,000 workers currently make between $7.25 and $8.25 an hour, about nine percent of the state’s workforce earns less than $9 an hour and roughly a third earn less than $15 an hour.

Nevada’s minimum wage law exempts large portions of the state’s workforce, including workers who collectively bargain with their employers, agricultural workers, taxi drivers and more

Republicans on the committee and groups representing businesses questioned the myriad of studies and figures used by supporters of the legislation, and expressed concerns that raising the wage too high would cut off employment opportunities for young or unskilled workers.

Randi Thompson, a lobbyist for the National Federation of Independent Businesses, warned legislators that economic studies and real life examples of raising the wage showed mixed results.

“The reality is, none of us really know what is going to happen in five to six years if you raise these wages,” she said. “This wage shift has to be absorbed, we just don’t know how.”

Las Vegas restaurant owner Gino Ferraro, who owns and operates Ferraro’s Italian Restaurant, said raising the wage would bring his payroll for his 70 employees to over half of his yearly income.

“If this increase goes in effect, it will be over 50 percent of my gross (income),” he said. “There’s no way I could keep my doors open.”

Diana Diaz, a 48-year-old cashier at McDonald’s, said that making $8.25 an hour was forcing her to take payday loans and borrow money from friends to make her bill payments every month.

“I was homeless before,” she said. “I would do whatever it takes to not do that again.”

Rachel West, a lobbyist with the Democratic-learning Center for American Progress, testified that raising the wage would have an outsized effect on minority workers, with 3 out of 10 African Americans and 4 out of 10 Hispanic workers seeing a raise if the wage was increased.

Last week, Assembly Democrat William McCurdy gave the first details of a bill that would raise the wage to $15 an hour over a period of several years. Neither Ford nor Assembly Speaker Jason Frierson would commit to supporting a raise hike of that magnitude at a press conference last Thursday.

Legislative attempts to raise the wage to $15 an hour, $9 an hour and eliminating it entirely and replacing it with a system based on the Consumer Price Index all failed to pass in 2015.

Ford said that the testimony of business owners and employees weren’t mutually exclusive, and said he asked businesses and others to come to him with suggestions about the wage, though he said he didn’t want to laden down the bill with “poison pills” like tip credits.

“This bill was an effort to try and find the right balance,” he said.

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