Kentucky’s Minimum Wage Hasn’t Increased in Over 11 Years

The last time Kentuckians saw a hike in the minimum wage was 2009 when the federal minimum wage increased to $7.25 per hour. Since then, 29 other states and the District of Columbia have raised their minimum wages above the federally mandated rate of $7.25.

The minimum wage is the lowest hourly rate employers are allowed to pay their non-exempt employees – the pay of exempt employees is controlled by different laws and regulations in the Fair Labor Standards Act and Kentucky Wage and Hour Act.

However, on November 24, 2020, Senator Reggie Thomas of Lexington, pre-filled a bill with the Kentucky General Assembly that would gradually increase the minimum wage in Kentucky to $15.00 per hour by July 1, 2026.[1]AN ACT relating to wages, https://apps.legislature.ky.gov/recorddocuments/bill/21RS/BR498/orig_bill.pdf, (last accessed Dec. 17, 2020. The proposed legislation would also raise the minimum wage for tipped employees, like restaurant servers, from $2.13 per hour to $7.25 per hour by 2026 as well. The bill would also allow cities and local governments in Kentucky to set their own minimum wages above the state minimum, which under current law is prohibited. Thomas filed a similar bill in 2019, but it made little progress in the Senate which is controlled by a Republican supermajority.

The Fair Labor Standards Act, the federal law which governs the minimum wage, allows individual states to set their own minimum wages above the federal baseline. Sen. Thomas’s legislation, if passed, would bring Kentucky’s minimum wage in line with its neighboring states:

  • Ohio: $8.80 per hour (as of January 1, 2021)
  • Illinois: $11.00 per hour (as of January 1, 2021)
  • West Virginia: $8.75 per hour
  • Missouri: $10.30 per hour (as of January 1, 2021)

Based on statistics from the U.S. Bureau of Labor Statistics, 4.4% of workers in Kentucky over the age of 16 are paid the federal minimum wage. This is nearly twice the national rate of 2.3%. The median hourly wage for all workers in Kentucky is $16.25 per hour, but the hourly wages for workers in service and retail industries is around half that.[2]U.S. Bureau of Labor Statistics, May 2017 State Occupational Employment and Wage Estimates
Kentucky
, https://www.bls.gov/oes/2017/may/oes_ky.htm (last accessed Dec. 17, 2020).
So, the proposed increase to $15.00 per hour could significantly improve the wages of many workers in Kentucky.

References

References
1 AN ACT relating to wages, https://apps.legislature.ky.gov/recorddocuments/bill/21RS/BR498/orig_bill.pdf, (last accessed Dec. 17, 2020.
2 U.S. Bureau of Labor Statistics, May 2017 State Occupational Employment and Wage Estimates
Kentucky
, https://www.bls.gov/oes/2017/may/oes_ky.htm (last accessed Dec. 17, 2020).
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