They say increase, although small, likely to send financial ripple up the pay scale
As a restaurant cook earning $7 an hour, Robbie Grainger won't immediately benefit when Kentucky's minimum wage increases to $5.85 an hour starting today.
But she's hoping the change soon will send a financial ripple up the pay scale, giving her and other hourly workers a boost of their own.
"Any time that you can make more, you've got to be happy with that," said Grainger, 48, who lives in a halfway house in downtown Louisville and wants her own apartment.
Some of those ripples already are spreading through the state's economy. On Saturday, Wal-Mart, the state's largest private employer with more than 32,000 workers, raised its entry-level pay to $6.15 an hour, up from the previous level of slightly more than $5.85.
The company's average pay for full-time associates in Kentucky is $10.37 an hour, but spokesman Jason Wetzel said he expects that will increase over the next several years as the higher minimum wage creates a more competitive environment for recruiting retail workers.
According to the Governor's Office for Policy Research, about 200,000 workers stand to receive some type of raise as a result of today's minimum-wage change.
The old minimum of $5.15 an hour had been in place for a decade. The new rate will go up to $6.55 an hour on July 1, 2008, and then to $7.25 an hour a year later.
Those increases are not expected to have a major immediate impact on most businesses, partly because they're coming in steps.
Carmen Hickerson, a spokeswoman for Greater Louisville Inc., the metro chamber of commerce, said she was not aware of any local employers planning to cut back staff because of the increase.
Stacy Roof, president and chief executive of the Kentucky Restaurant Association, predicted that fast-food franchises will be among those most affected by today's change. But she said it will take at least a couple of months to gauge the full impact.
"Some operators are just going to wing it and play it by ear," she said.
Meanwhile, advocates for the homeless and the working poor offered cautious praise for the new wage rate.
Jennifer Jewell, executive director of the grass-roots group Women In Transition, called the new wage floor "a necessary but insufficient step."
She said it may help some working families afford a few extra groceries, or pay for a new pair of shoes. The next step, she said, is to improve access to health care, education and affordable housing.
"Even when we raise wages up to $7.25, families are still going to be in poverty," she said. "They're still going to qualify for different social services."
"It's a move in the right direction," said Marlene Gordon, executive director of The Coalition for the Homeless Inc. "It's a recognition by the government that we know people can't live on this wage."
Gordon agreed with Jewell, however, that the increase won't put much of a dent in the number of people using local homeless services -- roughly 11,000 last year.
She said a single parent with two children in the Louisville area must earn $11.43 an hour to pay for a market-rate apartment.
And a survey conducted by the coalition showed that 39 percent of the area's working homeless already earned at least $8 an hour as of January.
They are people like Bob Lawrence, who lives at Wayside Christian Mission. He works at a factory and earns $10 an hour. Lawrence said yesterday that the biggest hurdle to finding a permanent place to live is saving money for a deposit, an initial payment for utilities and an emergency cushion.
Cleo Johnson, another resident at Wayside, was optimistic that the state change eventually will cause a ripple that will bump his wage, allowing him to save more money.
"Any time the minimum wage goes up, people are a little happier, they can buy more," said Johnson, who also earns around $10 an hour.
Reporter Alex Davis can be reached at (502) 582-4644.
The Associated Press contributed to this story.
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