Legislature(2009 - 2010)BELTZ 211

02/05/2009 01:30 PM LABOR & COMMERCE


Download Mp3. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 83 VOCATIONAL REHABILITATION COMMITTEE TELECONFERENCED
Moved CSSB 83(L&C) Out of Committee
*+ SB 1 ALASKA MINIMUM WAGE TELECONFERENCED
Heard & Held
                    SB 1 ALASKA MINIMUM WAGE                                                                                
                                                                                                                              
1:47:44 PM                                                                                                                    
CHAIR PASKVAN called  the meeting back to order at  1:47 p.m. and                                                               
announced SB 1 to be up for consideration.                                                                                      
                                                                                                                                
SENATOR WIELECHOWSKI,  sponsor of SB  1, gave a brief  history of                                                               
the minimum wage in Alaska.  In 2002 about 47,000 Alaskans signed                                                               
petitions  to raise  it. Alaska  has historically  been at  least                                                               
0.50 cents higher  than the federal average.  The signatures were                                                               
presented  to   the  Lieutenant  Governor;  the   initiative  was                                                               
certified and  was placed on the  ballot in 2003. Had  it passed,                                                               
it would  have increased the  minimum wage to $7.15  cents, which                                                               
it  currently is,  but it  also  had a  provision for  a cost  of                                                               
living allowance.                                                                                                               
                                                                                                                                
The  legislature  found that  80  percent  of Alaskans  supported                                                               
increasing the  minimum wage, which  at $7.15/hr in 2003  was the                                                               
highest  in the  nation. Alaska  has  among the  highest cost  of                                                               
living in the United States; so  it only stands to reason that we                                                               
should have among  the highest minimum wage, if  not the highest.                                                               
The  legislature passed  the bill,  but the  issue came  back the                                                               
next year and the cost  of living increase provision was stripped                                                               
out.  Had that  provision,  which the  voters  surely would  have                                                               
voted for,  been in effect  then the  minimum wage in  2010, when                                                               
this  bill takes  effect, would  be $8.78.  "That's the  starting                                                               
point for this piece of legislation."                                                                                           
                                                                                                                                
1:53:05 PM                                                                                                                    
SENATOR  WIELECHOWSKI  estimated  this bill  will  affect  22,254                                                               
Alaskans. No one wants to  hurt small businesses, but the reality                                                               
is that according  to 650 economists, including  five Nobel Prize                                                               
winners  and  six  past  presidents   of  the  American  Economic                                                               
Association, who signed  a letter in 2006, said  that federal and                                                               
state  minimum  wage  increases "can  significantly  improve  the                                                               
lives  of  low income  workers  and  their families  without  the                                                               
adverse affects that critics have claimed."                                                                                     
                                                                                                                                
The  federal  minimum  wage  was  tiered  to  increase  in  three                                                               
different steps with the third  step going into effect this July.                                                               
So, for  the first  time in Alaskan  history the  federal minimum                                                               
wage is going  to actually be higher than the  state of Alaska's.                                                               
                                  th                                                                                            
In  July Alaska  will have  the 40   lowest minimum  wage  in the                                                               
United  States.  Eighty  percent   of  his  constituents  support                                                               
raising the minimum wage; many  small businesses  realize it will                                                               
not have  the damaging impacts  that people project,  because the                                                               
more  money that  people have  to spend,  particularly the  lower                                                               
income people,  they spend it in  the economy. They do  not hoard                                                               
it.                                                                                                                             
                                                                                                                                
SENATOR  WIELECHOWSKI argued  that some  people say  that minimum                                                               
wage only  applies to  kids who  work at  McDonalds or  fast food                                                               
restaurants, but  the research  does not  support that.  He found                                                               
that  46  percent of  all  families  with affected  workers  rely                                                               
solely on the  earnings from those workers; and  about 25 percent                                                               
of people who earn the minimum wage have families.                                                                              
                                                                                                                                
When  you look  at the  absolute minimum  people can  live on  in                                                               
Alaska  - heating  for instance  -  the annual  average cost  for                                                               
heating is  $924. But  in Fairbanks,  people are  probably paying                                                               
that per  month. The state  minimum wage right now  earns someone                                                               
about $14,000 per year and you  can't live on that; increasing it                                                               
to $8.75/hr. is not the panacea,  but he is saying that the state                                                               
should adopt a  policy and try to give these  people a little bit                                                               
of help in getting by. The  cost of everything in our economy has                                                               
risen  dramatically since  2003 when  the minimum  wage was  last                                                               
raised.                                                                                                                         
                                                                                                                                
1:56:51 PM                                                                                                                    
SENATOR BUNDE said  this measure would increase  the minimum wage                                                               
from $14,000  to only $17,000/yr. and  asked why not make  a more                                                               
substantial change.                                                                                                             
                                                                                                                                
SENATOR WIELECHOWSKI asked him to propose a higher one.                                                                         
                                                                                                                                
1:57:45 PM                                                                                                                    
SENATOR  THOMAS  said  his figures  show  Senator  Wielechowski's                                                               
figures comport  with Juneau  figures for renting  just a  room -                                                               
$660 to  $1000/mo. One bedroom  condos and apartments  average in                                                               
excess  of $1000  and two  bedrooms were  anywhere from  $1500 to                                                               
$2500.                                                                                                                          
                                                                                                                                
1:58:51 PM                                                                                                                    
He found  in the  course of discussion  in other  committees that                                                               
the Mental Health Trust came up  with the figure of 85 percent of                                                               
minimum wage is consumed by housing.                                                                                            
                                                                                                                                
1:59:42 PM                                                                                                                    
SENATOR  BUNDE referenced  the letters  of support  the committee                                                               
members  had received  and he  wanted to  know who  organized the                                                               
campaign because the forms were all the same.                                                                                   
                                                                                                                                
CHAIR PASKVAN didn't know the answer, but hoped to find out.                                                                    
                                                                                                                                
2:00:52 PM                                                                                                                    
SENATOR   THOMAS   asked   if  Senator   Wielechowski   had   any                                                               
demographics on the  22,000 impacted folks - age,  race and where                                                               
they live.                                                                                                                      
                                                                                                                                
2:01:16 PM                                                                                                                    
MICHELLE  SYDEMAN, aide  to Senator  Wielechowski,  said a  paper                                                               
prepared by the DOLWD breaks  down the 22,000 not by demographics                                                               
such as age or sex, but by industry in which they work.                                                                         
                                                                                                                                
CHAIR PASKVAN  remarked that  his heating bill  for the  month of                                                               
January was over $800. He then opened public testimony.                                                                         
                                                                                                                                
2:02:12 PM                                                                                                                    
GRAY MITCHELL,  Director, Labor Standards and  Safety, Department                                                               
of  Labor   and  Workforce  Development  (DOLWD),   said  he  was                                                               
available  to  answer  questions  on  SB  1  and  said  that  the                                                               
department had a neutral position on it.                                                                                        
                                                                                                                                
BRIAN  RAY,   Economist,  Division  of  Research   and  Analysis,                                                               
Department of  Labor and Workforce  Development (DOLWD),  said he                                                               
manages the occupational information unit.                                                                                      
                                                                                                                                
2:03:54 PM                                                                                                                    
SENATOR BUNDE  asked Mr. Ray,  as an economist, what  raising the                                                               
minimum wage would do. Many studies have found both conclusions.                                                                
                                                                                                                                
MR. RAY replied  that many studies have found  everything from no                                                               
impact, negative  impact and  shifts in  the demographics  of the                                                               
people  who  are  later  employed after  the  imposition  of  the                                                               
minimum  wage,  but  it  is   difficult  to  reach  a  reasonable                                                               
conclusion based on  a review of those studies. So,  he tries his                                                               
best  to  look  at  the  facts  and  history.  The  minimum  wage                                                               
increased in  Alaska in  2003; he reviewed  that and  saw certain                                                               
types of movements in the employed  labor force, but didn't see a                                                               
decrease in employment.                                                                                                         
                                                                                                                                
He worked  with the  Division of Labor  Standards and  Safety and                                                               
found a  slight decline of  about 20 percent in  applications for                                                               
youth  work permits  the year  following the  increase. He  would                                                               
have to  surmise from that  that there  was less interest  in the                                                               
employment of the  youth in the labor force at  that point. Aside                                                               
from that, he  understands that young workers who  work less than                                                               
30 hours/wk. do not have to be paid the state minimum wage.                                                                     
                                                                                                                                
SENATOR BUNDE  asked if the  applications for youth  work permits                                                               
come from employers and not from the young people themselves.                                                                   
                                                                                                                                
2:06:37 PM                                                                                                                    
MR. MITCHELL  replied that is  correct; the employer  is required                                                               
by Alaska  law to  get a work  permit to employ  a worker  who is                                                               
under the age of 17.                                                                                                            
                                                                                                                                
CHAIR PASKVAN asked  since that reduction took place  in 2004 had                                                               
an analysis of youth work  permits been done to determine whether                                                               
there was a catch up.                                                                                                           
                                                                                                                                
MR. RAY replied that he didn't  have the numbers in front of him,                                                               
but it seemed to be a  stair-step movement downwards for that one                                                               
year, and then the permits came up to previous levels.                                                                          
                                                                                                                                
SENATOR MEYER asked  if an employer hires  for training purposes,                                                               
does he have to pay minimum wage.                                                                                               
                                                                                                                                
MR. MITCHELL replied that is a  federal law, and they call it the                                                               
"training wage" or the "opportunity  wage" for the first 90 days,                                                               
but the state hasn't adopted it.                                                                                                
                                                                                                                                
SENATOR MEYER wanted an example  of manufacturing that pays below                                                               
$7.75 in  reference to a  handout labeled "Estimated  Alaska 2007                                                               
Employment by Industry."                                                                                                        
                                                                                                                                
MR. RAY  replied that most of  the manufacturing that was  in the                                                               
lower pay ranges was in the seafood processing industry.                                                                        
                                                                                                                                
2:09:14 PM                                                                                                                    
SENATOR BUNDE  said he always  assumed that whatever  the minimum                                                               
wage increases to,  that those costs weren't  necessarily born by                                                               
business  and  industry, but  rather  passed  on through  to  the                                                               
public. He assumed that would be correct if this bill passed.                                                                   
                                                                                                                                
MR. RAY answered yes. He didn't  see differences in how the wages                                                               
were  applied among  state or  across industries,  but where  one                                                               
might  spend  more  on one  product  than  another  (substitution                                                               
effect),  then   that  could  potentially   have  an   impact  on                                                               
businesses'  sales of  goods and  services  that had  more of  an                                                               
increase because  of the  increased minimum  wage. Manufacturing,                                                               
to the  degree that it would  make a product more  expensive, and                                                               
someone  substitutes chicken  for  seafood,  for instance,  could                                                               
impact the seafood industry.                                                                                                    
                                                                                                                                
2:11:01 PM                                                                                                                    
SENATOR MEYER said  they are attempting to help  the buying power                                                               
of the  lower income working person,  but asked if they  are they                                                               
truly doing that if the cost of the goods goes up too.                                                                          
                                                                                                                                
MR. RAY replied  if everyone's' wages went up,  they could expect                                                               
to  see a  commensurate increase  in overall  prices, but  to the                                                               
degree that the minimum wage is  being applied to a small portion                                                               
of the  workforce, they wouldn't  expect the  prices to go  up as                                                               
much  as the  minimum wage.  At  the end  of the  day, the  lower                                                               
income people would have more buying power.                                                                                     
                                                                                                                                
SENATOR  MEYER  asked  if  labor  wasn't  typically  the  largest                                                               
expense.                                                                                                                        
                                                                                                                                
MR.  RAY  replied,  "Generally  not."    As  the  prices  of  raw                                                               
materials go  up, that isn't  necessarily linked to  any increase                                                               
in the cost of labor to produce a product.                                                                                      
                                                                                                                                
SENATOR  BUNDE supposed  that the  minimum wage  is a  delta, and                                                               
whoever is  making more than the  minimum wage can say  that went                                                               
up,  so  my  wage needs  to  go  up.  He  asked if  Mr.  Ray  had                                                               
information as  to whether  or not  that conventional  wisdom was                                                               
correct.                                                                                                                        
                                                                                                                                
2:14:05 PM                                                                                                                    
MR. RAY replied that he  called a non-scientific random sample of                                                               
employers  a couple  of years  ago and  asked them  that specific                                                               
question.  They all  agreed  that they  would  feel compelled  to                                                               
increase  the  wages of  the  all  the  workers who  were  making                                                               
somewhat close  to the  minimum as well.  But that  would quickly                                                               
diminish as  they moved out  of functional areas of  the company;                                                               
for example, employees who working in  a bakery and they were all                                                               
baking, and several  of them were working in a  range between the                                                               
old minimum  wage and the new,  possibly all of the  bakers might                                                               
get a  pay raise  because of  the imposition  of the  new minimum                                                               
wage, but  the management and distributors  wouldn't because they                                                               
were  already above  the minimum  wage.  "The effect  is to  have                                                               
incrementally smaller increases in the  wages of those people who                                                               
are at or slightly above the minimum wage."                                                                                     
                                                                                                                                
2:15:18 PM                                                                                                                    
SENATOR THOMAS  asked if  he could assume  that whoever  pays for                                                               
the study, that's how the study comes out.                                                                                      
                                                                                                                                
MR. RAY responded  that he didn't intend to say  that the studies                                                               
are biased  because good  studies are not  entered into  with the                                                               
attempt to conclude one way or the other.                                                                                       
                                                                                                                                
2:18:41 PM                                                                                                                    
NEIL MCKINNON,  President, Alaska  Laundry and Cleaners,  said he                                                               
is a member NFIB; he has  five employees who are prisoners inside                                                               
Lemon Creek Prison  who do the laundry for  the Bartlett Hospital                                                               
for $5/hr;  prisoners doing  the ferry  laundry earn  $1/hr. This                                                               
rate was  set up  when the  program was created  and it  has been                                                               
working for years. He explained:                                                                                                
                                                                                                                                
     The  prison   industry  has  solved  this   problem  by                                                                    
     whacking  my  paycheck  to my  employees  for  cost  of                                                                    
     incarceration, guards - on and  on until they got their                                                                    
     pay  down  to  where  it was  an  acceptable  level  of                                                                    
     difference between  the $1  and the  $7. So  these guys                                                                    
     were  maybe  taking  home $2/hr.,  which  didn't  breed                                                                    
     massive problems inside the prison over inequities.                                                                        
                                                                                                                                
Outside the prison,  he said, he has other employees  and none of                                                               
those are  at minimum wage other  than those who are  high school                                                               
kids or entering into the work  system. He takes a chance on them                                                               
just showing  up to  work, but  in the  real world  he has  to be                                                               
above $7.15 just to get a pool "that  you can even want to take a                                                               
chance  on."   These  kids  pretty   much  make  change   in  the                                                               
Laundromat, they  basically sit  there and surf  the web,  read a                                                               
book or start a machine if someone has a problem.                                                                               
                                                                                                                                
MR. MACKINNON  said he has  already looked at cutting  this cost,                                                               
because his is a self-service  Laundromat; if this bill passes he                                                               
will go  to straight  self-service and put  some of  these people                                                               
out  of jobs.  He  explained  that many  of  these people  aren't                                                               
living on this job, but it  gives them extra money and helps them                                                               
out;  it gives  them  something to  do. That  could  go away.  He                                                               
remarked that  he started a lot  of jobs at minimum  wage, but he                                                               
didn't stay at that rate long.                                                                                                  
                                                                                                                                
2:23:22 PM                                                                                                                    
SENATOR THOMAS  asked if  the people working  in prison  were his                                                               
employees working there or were they prisoners.                                                                                 
                                                                                                                                
MR.  MCKINNON replied  they are  prisoners; they  are paid  $7.15                                                               
(minimum wage),  the prisoners  doing state  ferry work  get paid                                                               
around  $1; prisoners  working right  inside the  prison sweeping                                                               
floors and things like that get paid 0.50 or 0.25 cents an hour.                                                                
                                                                                                                                
2:24:20 PM                                                                                                                    
SENATOR  BUNDE remarked  that one  of the  "forms" they  received                                                               
from  constituents  said  if  the  minimum  wage  was  increased,                                                               
teenage shoplifting would decrease. He  asked Mr. MacKinnon if he                                                               
noticed that people who make less money are dishonest.                                                                          
                                                                                                                                
MR. MCKINNON  replied no; he has  found that people who  are paid                                                               
less money are usually the most  honest and that, "You never know                                                               
who is going to steal from you."                                                                                                
                                                                                                                                
SENATOR DAVIS remarked  that some people who are  at minimum wage                                                               
are not teenagers; they have families.                                                                                          
                                                                                                                                
2:26:10 PM                                                                                                                    
JOHN  FABIANO,  Red  Robin, Anchorage,  said  Red  Robin  employs                                                               
approximately  200  individuals  and   opposed  SB  1.  It  would                                                               
significantly  impact  their  current  operations  negatively  by                                                               
increasing  wages  of  employees  who are  already  earning  $15-                                                               
$20/hr. in tips alone. So,  obviously this increase is not geared                                                               
towards those who need it the most.                                                                                             
                                                                                                                                
He said that  everyone has seen significant increases  in all the                                                               
utilities and commodities  - some 100 percent,  but 30-50 percent                                                               
on all  the consumables  - fuel  surcharges are  the norm  now as                                                               
opposed to the exception.                                                                                                       
                                                                                                                                
MR.  FABIANO  said he  would  also  be  less  apt to  give  merit                                                               
increases  as frequently.  It would  create  a greater  disparity                                                               
between the wages earned per  hour inside the restaurants between                                                               
tipped employees and non-tipped  employees. It would only benefit                                                               
the individuals  in his current  operations who probably  need it                                                               
the least.                                                                                                                      
                                                                                                                                
In closing,  he said  he would  be supportive  of a  minimum wage                                                               
increase  provided some  sort  of dispensation  was  given to  an                                                               
equitable distribution  of wages  among all  employees, something                                                               
that  is already  provided for  under federal  law that  has been                                                               
adopted  in  43   other  states  in  the  form   of  "tip  credit                                                               
legislation."                                                                                                                   
                                                                                                                                
2:30:52 PM                                                                                                                    
SENATOR THOMAS  asked how  many of his  employees are  at minimum                                                               
wage now.                                                                                                                       
                                                                                                                                
MR.  FABIANO replied  80-90 servers  in multiple  stores and  his                                                               
figures are  based on what  is declared as  tips. A lot  of times                                                               
servers are making a lot more than the managers.                                                                                
                                                                                                                                
2:31:56 PM                                                                                                                    
SENATOR THOMAS asked if they are all full-time employees.                                                                       
                                                                                                                                
MR. FABIANO replied  that some of them have two  jobs. It depends                                                               
on their schedules. Most of  the time servers are considered part                                                               
time between 20-25 hours. A lot are full-time college students.                                                                 
                                                                                                                                
SENATOR  THOMAS  said that  generally  tips  are shared,  but  it                                                               
didn't sound like they are shared in his establishment.                                                                         
                                                                                                                                
2:33:08 PM                                                                                                                    
MR. FABIANO replied that the $15-$20/hr  is a net after they have                                                               
tipped  out to  the support  staff -  the busers,  the host,  the                                                               
mixologists, et cetera.                                                                                                         
                                                                                                                                
2:33:28 PM                                                                                                                    
KRYSTAL SCHOENROCK,  Secretary, Kenai  Peninsula CHARR,  said she                                                               
owns a bar  in Nikiski. She has three employees  and herself; she                                                               
opposed SB 1. She said she  has already lost business because the                                                               
liquor  industry, the  delivery people  and everybody  else keeps                                                               
raising their prices;  the customers don't want to  pay the price                                                               
and they are more or less  buying their own stuff and going home.                                                               
Half  of her  workforce is  part-time and  she has  one full-time                                                               
bartender.                                                                                                                      
                                                                                                                                
2:35:11 PM                                                                                                                    
SENATOR  THOMAS asked  what kind  of  impact the  closing of  the                                                               
Agrium plant had on her business.                                                                                               
                                                                                                                                
MS. SCHOENROCK replied that didn't  have much of an impact; those                                                               
employees didn't frequent her establishment.                                                                                    
                                                                                                                                
2:36:01 PM                                                                                                                    
BILL BUBBEL,  owner, Pump House  Restaurant, Fairbanks,  said his                                                               
is a  year-round business with  about 45 employees in  the winter                                                               
and  100 in  the summer.  He  didn't adamantly  oppose the  basic                                                               
concept of  a minimum  wage raise, but  he thought  the reasoning                                                               
used for it is faulty.                                                                                                          
                                                                                                                                
Basically,  he said,  the 7.4  percent of  the workforce  earning                                                               
$8.75/hr. are tipped people; so  that really skews the net effect                                                               
of the  increase. No one in  Fairbanks offers a minimum  wage job                                                               
for  a non-tipped  position  because you  can't  find anybody  to                                                               
fulfill it. The basic entry wage  for a fast food business now is                                                               
$10/hr. That's  problem number  one, he said,  and number  two is                                                               
that businesses  that have the  most minimum wage  employees have                                                               
labor as  their single  biggest expense.  People in  Alaska don't                                                               
really work for minimum wage.                                                                                                   
                                                                                                                                
What concerns him  most is using the CPI index,  because the feds                                                               
don't use  it; so why should  Alaska? We are in  a depression and                                                               
the people who are most  affected are the small businesses. Right                                                               
now  his business  is down  about 25  percent, a  huge amount  of                                                               
sales and it's strictly due to the  economy. So, if he has to pay                                                               
more for a minimum  wage, that has to be added  to the price that                                                               
he  charges  his  customers  and  right now  they  are  having  a                                                               
difficult time  affording the prices  that he already has  had to                                                               
raise because of all the increases he has had to face.                                                                          
                                                                                                                                
MR.  BUBBEL said  the only  way to  offset this  is a  tip credit                                                               
provision. His  employees average from  $20/hr. in the  winter to                                                               
$40/hr. in  the summer; so they  are highly paid. His  problem is                                                               
that he can't find managers or  good line cooks for what he pays,                                                               
$14/hr., because they would rather be a server and make tips.                                                                   
                                                                                                                                
He said  that Senator Thomas  worries about the  foreign workers,                                                               
"J1s,"  coming in,  but the  reason they  are here  in the  first                                                               
place is  because there  isn't enough people  who are  willing to                                                               
work at a  wage that a small business can  afford, $10-$12/hr. By                                                               
law he  cannot pay  a J1 less  than the going  wage for  the same                                                               
kind of work. His  lowest wage for a J1 is  $9/hr. already and as                                                               
soon as they have learned a trade they go up.                                                                                   
                                                                                                                                
2:41:02 PM                                                                                                                    
SENATOR  THOMAS disagreed  on his  reason for  the "J1  workers,"                                                               
particularly with the way they  are couched as cultural exchange.                                                               
He didn't  see any  students among the  group or  any integration                                                               
into the community  at all. They pretty much travel  in their own                                                               
group,  and he  hadn't noticed  many at  Mr. Bubbel's  particular                                                               
establishment. But  he does  know hundreds  of kids  in Fairbanks                                                               
when school is  out and that's the justification  that was always                                                               
given to him - that it does  not match up with the school season,                                                               
which  for college  graduation  is usually  the  first or  second                                                               
weekend in  May and the  tourism season, which is  considered the                                                               
early part of May through  mid-September. School starts back late                                                               
August or early September.                                                                                                      
                                                                                                                                
2:42:50 PM                                                                                                                    
GABE ACEVES, Executive Director,  Alaska Public Interest Research                                                               
Group  (AKPIRG), supported  SB  1  for most  of  the reasons  the                                                               
sponsor  stated  earlier,  especially with  the  adjustments  for                                                               
inflation. No  one has yet pointed  out that not only  in Alaska,                                                               
but  across the  nation,  our minimum  wage  standards have  been                                                               
woefully inadequate for years. In  fact if you look at statistics                                                               
from economists on both sides  of the spectrum, studies show that                                                               
people who are  trying to earn a living today  actually have less                                                               
purchasing power than  their fathers did a generation  ago in the                                                               
60s and 70s.                                                                                                                    
                                                                                                                                
Another thing that  hasn't been mentioned is that  along with the                                                               
exorbitant  increases   in  the  cost  of   living  and  workers'                                                               
purchasing   power  being   lower,   workers'  productivity   has                                                               
increased over the past 20 years  by 50-70 percent. So some large                                                               
companies who  have employed  people for  20-30 yrs  have dragged                                                               
their feet  on things like  the minimum wage while  their workers                                                               
are actually  producing more for  them today than they  ever were                                                               
before. But they are getting paid less in terms of real dollars.                                                                
                                                                                                                                
2:46:42 PM                                                                                                                    
MR. ACEVES read  a passage from "The Wealth  of Nations," written                                                               
by Adam Smith, published in 1776. It says:                                                                                      
                                                                                                                                
     A man must  always live by his work and  his wages must                                                                    
     at least be sufficient to  maintain him. They must even                                                                    
     upon  most  occasions  be somewhat  more  otherwise  it                                                                    
     would be  impossible for him  to bring up a  family and                                                                    
     the rates  of such  workmen could  not last  beyond the                                                                    
     first generations.                                                                                                         
                                                                                                                                
     It seems  certain that in  order to bring up  a family,                                                                    
     the labor of  the husband and wife  together must, even                                                                    
     in the lowest species of  common labor, be able to earn                                                                    
     something  more than  what is  precisely necessary  for                                                                    
     their own maintenance.                                                                                                     
                                                                                                                                
He  remarked that  Adam Smith's  work is  the "fountain  head for                                                               
free  market  economies all  over  the  world." His  approach  to                                                               
economics was hands  off and no government  involvement, but even                                                               
he recognized 200 years ago that  people have to able to earn not                                                               
only what  is absolutely  minimally required for  them to  earn a                                                               
living, but somewhat more in order for them to carry on.                                                                        
                                                                                                                                
2:48:13 PM                                                                                                                    
SENATOR BUNDE asked what would be an adequate minimum wage.                                                                     
                                                                                                                                
MR. ACEVES didn't have a specific number to recommend.                                                                          
                                                                                                                                
2:49:42 PM                                                                                                                    
TERRY WANZER, Alaskan  Hotel and Lodging Association,  said he is                                                               
co-owner  of  the  Best Western  Landing  Hotel  and  Restaurant,                                                               
Ketchikan. He  opposed SB  1 as  currently drafted.  He disagreed                                                               
with previous speakers that the  cost of living would be impacted                                                               
negatively if this  passed. Secondly, the said  he employs 70-100                                                               
people  depending on  the season  and no  one in  any departments                                                               
other than  serving positions make  the minimum wage.  You cannot                                                               
find  employees who  will  work for  less  than $10-$12/hour,  he                                                               
said.                                                                                                                           
                                                                                                                                
He agreed with  the other 42 states that have  tip credits. It is                                                               
true that a lot of these  are students or entry level people, but                                                               
a lot  of his employees who  do make minimum wage  have been with                                                               
him  for 17  yrs. or  longer.  Raising the  minimum wage  doesn't                                                               
increase buying  power, he stated.  These costs cannot  be passed                                                               
on to  the public  like a freight  surcharge. "We  can't increase                                                               
the  cost of  a hamburger....  You can't  concurrently raise  the                                                               
cost of your  menu, because you won't have  any customers." These                                                               
should be  merit increases  built into the  American way  of hard                                                               
work equals higher  pay. Business owners take the  risk to create                                                               
the jobs in the first place.                                                                                                    
                                                                                                                                
2:53:31 PM                                                                                                                    
BUSTER  MARTIN, United  Food and  Commercial Food  Workers Union,                                                               
Anchorage, said  he represents grocery workers  around the state,                                                               
who have  to start at  minimum wage and  he supported SB  1 along                                                               
with  the   inflation-proofing  language.  He  said   he  gets  a                                                               
"phenomenal" amount of phone calls  from people who need help and                                                               
can't afford  to take care  of their families, especially  in the                                                               
last five years.  He gets calls from people who  can't make it on                                                               
$12-$13/hr. in  places like Ketchikan  and Juneau where  the cost                                                               
of living is higher.                                                                                                            
                                                                                                                                
SENATOR BUNDE asked how much higher the minimum wage should be.                                                                 
                                                                                                                                
MR. MARTIN replied  that he is not an economist,  but the problem                                                               
with starting  wages being so  low is that workers  can't survive                                                               
for  the  3-5 months  it  takes  for  the  employer to  grant  an                                                               
increase. Contracts make the increase based on hours.                                                                           
                                                                                                                                
2:57:27 PM                                                                                                                    
JENS NANNESINS,  owner, Southside  Bistro/City Diner,  opposed SB                                                               
1.  He employs  100 employees  and 60  of them  work for  minimum                                                               
wages, but they make good tips.                                                                                                 
                                                                                                                                
SENATOR BUNDE asked  if the committee would  consider inserting a                                                               
tip credit provision in this bill.                                                                                              
                                                                                                                                
CHAIR PASKVAN said he thought the sponsor would consider it.                                                                    
                                                                                                                                
2:58:41 PM                                                                                                                    
JOHN BROWN,  Fairbanks, supported SB  1. He understands  when the                                                               
minimum wage  is raised  that he  will have to  pay a  little bit                                                               
more when he goes out to  eat, but it's essential that wages keep                                                               
up with  inflation and they haven't  for 40 years. "I  think it's                                                               
part of the structural deficiency in our economy right now."                                                                    
                                                                                                                                
CHAIR PASKVAN closed the public testimony.  He held SB 1 for next                                                               
Thursday.                                                                                                                       

Document Name Date/Time Subjects
SB01 - Alaska Minimum Wage - Bill Packet.pdf SL&C 2/5/2009 1:30:00 PM
SL&C 2/12/2009 1:30:00 PM
SL&C 2/17/2009 1:30:00 PM
SL&C 2/24/2009 1:30:00 PM
SB 1
SB83 - State Voc Rehab Cmte - Bill Packet.pdf SL&C 2/5/2009 1:30:00 PM
SB 83