Region can't join other cities in hiking minimum wage

2014-06-18T17:30:00Z 2014-06-18T19:37:23Z Region can't join other cities in hiking minimum wageDan Carden dan.carden@nwi.com, (317) 637-9078 nwitimes.com
June 18, 2014 5:30 pm  • 

INDIANAPOLIS | As cities across the country increase the minimum wage businesses must pay their employees, Northwest Indiana communities won't be joining the trend — it's illegal.

In 2011, Republican Gov. Mitch Daniels signed House Enrolled Act 1538, which forbids local governments from requiring companies pay a minimum wage higher than the state or federal minimum wage, which have been set at $7.25 per hour since 2009, and $2.13 per hour for tipped employees.

State Sen. Scott Schneider, R-Indianapolis, who sponsored the law, said at the time it was a "pre-emptive" measure to head off a shadowy national effort aimed at getting local governments to raise their minimum wages.

In the three years since, several large cities indeed have boosted their lowest legal pay rate, including San Francisco, to $10.74 an hour, Santa Fe, N.M., to $10.51, and and San Jose, Calif., to $10.15.

This month, the Seattle City Council voted to phase in a $15-per-hour minimum wage over the next seven years.

In addition, 22 states have set a minimum wage higher than the federal rate, including neighboring Illinois, Michigan and Ohio.

Illinois voters this November also will be asked in a nonbinding referendum if the state's minimum wage should increase to $10 an hour from $8.25.

Similar efforts to raise the Indiana minimum wage repeatedly have failed in the Republican-controlled General Assembly.

Earlier this year, state Rep. Shelli VanDenburgh, D-Crown Point, lost a House vote on raising the minimum wage to $8.25 an hour. Her proposal to submit the question to voters in a referendum also was rejected.

Senate Democrats were outvoted on their plan to take the Indiana minimum wage to $10 an hour over seven years, to match the seven years of business tax cuts lawmakers were considering.

The reduction in the corporate income tax rate to 4.9 percent by 2021, from 7.5 percent, was signed into law by Republican Gov. Mike Pence in March.

The minimum wage hike didn't make it.

Indiana University nevertheless decided to raise the lowest rate it pays employees to $8.25 an hour, starting July 1. Purdue University, headed by Daniels, didn't follow suit.

According to the U.S. Bureau of Labor Statistics, 6.2 percent of Hoosier hourly workers, or 108,000 people, are paid at or below the minimum wage.

Just six states have a higher percentage of their workers earning the minimum wage. The national average is 4.3 percent.

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