A Second Look at Repealing Minimum Wage

(Sean Whaley/Nevada News Bureau) – State Sen. Joe Hardy, R-Boulder City, told a Senate panel today the Legislature should move forward with repealing the state’s minimum wage law.

Hardy testified in support of his Senate Joint Resolution 2, which would have to pass this session and again in 2013, then go to a vote of the people in 2014, to repeal the state’s law that sets the minimum wage higher than the federal rate.

Hardy told the Senate Commerce, Labor and Energy Committee that the law, which has pushed the minimum wage in Nevada to $8.25 an hour for most workers as of July 1, 2010, has had a chilling effect on hiring and hampered the state’s economic recovery. The law, which is now part of the state constitution, requires a complex calculation, but essentially means Nevada workers earn $1 more an hour than the federal minimum wage rate.

The federal minimum wage is now $7.25 an hour.

Hardy said 36 states have a minimum wage set at the federal level. The other 14 have higher rates, including Nevada.

The Legislature needs to support repeal of the law to return the state to a level playing field with other states “for those who want to create jobs and foster economic growth in Nevada,” he said.

The Nevada State AFL-CIO worked to put the state’s minimum wage law on the ballot. It passed twice and because it is now in the state constitution, repealing or changing its provisions is a complex and time consuming process.

Speakers, including business representatives and union advocates, took predictable stances regarding the proposal.

Tray Abney with the Reno-Sparks chamber said the state’s minimum wage should not be on “autopilot,” rising without regard to economic conditions.

Sam McMullen, representing the Las Vegas chamber, said locking the law into the state constitution has made it impossible to change as economic conditions have changed.

But Danny Thompson, executive secretary-treasurer of the Nevada State AFL-CIO, said the ballot initiative was launched because the Legislature refused to consider proposals to increase the minimum wage.

Gail Tuzzolo, also with the Nevada State AFL-CIO, said Nevadans “should be talking about creating jobs and rebuilding the economy, not taking income away from individuals struggling to put food on their tables.”

The historical record shows that increasing the minimum wage has reduced the poverty level, she said. Economists have demonstrated that the statistical effect of the minimum wage on job losses is nearly nonexistent, Tuzzolo said.

The panel took no immediate action on the bill.