There's disagreement over whether gradually raising Nebraska's minimum wage from its current $9 an hour to $15 an hour is a good thing.
Initiative 433, which is on the Nov. 8 ballot, would bump up the minimum wage to $10.50 an hour next year, and it would increase by $1.50 an hour annually until reaching $15 an hour in 2026, after which it would be subject to an annual cost-of-living adjustment.
Opponents, which include Republican lawmakers and some business owners and business groups, say such a law would hurt small-business owners and lead to fewer jobs, especially in rural areas.
Passing Initiative 433 “will crush an already struggling rural Nebraska” by forcing such businesses to raise prices, cut workers, pay more in overtime or even close, Katie Bohlmeyer, policy and research coordinator for the Lincoln Independent Business Association, said during a state-mandated hearing on the initiative earlier this month in North Platte.
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But supporters, including the ACLU of Nebraska, Nebraska Appleseed, the Nebraska State AFL-CIO and the NAACP Lincoln Branch, as well as some business owners, say raising the wage would lift people out of poverty and also show young people that Nebraska is a state that values them.
Nebraska Business for a Fair Minimum Wage, a coalition of more than 300 business owners and executives, has come out strongly in support of the $15 minimum wage.
“People can’t make ends meet on $9 an hour, and a minimum wage that low devalues workers’ time on the job," said Julie Sonderup, owner of Moose’s Tooth Outdoor Co. in Lincoln and a member of the coalition. "We pay more and employees know we value their work and time. Properly compensating employees leads to happier employees who are generally better at customer service. This leads to happier customers. And happier customers tend to spend more money.”
The National Employment Law Project estimated that about 150,000 Nebraska workers would get a pay increase if Initiative 433 passes, resulting in nearly $280 million more a year in their paychecks.
What's more, studies have shown that three-fourths of workers who would benefit from the increase are older than 20 and 61% are women.
Creighton University economist Ernie Goss said a vote to raise Nebraska's minimum wage won't have that much of an effect on the labor market, because the market rate for most jobs is already higher than $15 an hour because of factors such as inflation and a labor shortage.
Goss said any job losses are likely to be minimal and will probably fall hardest on teenagers. However he foresees the potential for businesses located near the state's borders to consider moving to a neighboring state if the minimum wage is lower.
The minimum wage set by the federal government remains at $7.25 an hour, which is the law in Iowa and Kansas.
While the potential impact of a minimum wage increase in Nebraska on businesses has been well-documented, what hasn't been discussed much is how a higher wage might affect state and local governments.
As of September, more than 171,000 people in Nebraska worked in government jobs, making it the second-largest industry in the state.
Most full-time government workers already make well more than $15 an hour, but there are thousands of part-time and seasonal workers who make well below that number, and having to pay them more could have budgetary implications.
For example, there are approximately 1,200 people working for the state of Nebraska, either in permanent or temporary positions, who make less than $15 an hour, said Eric Maher, communications director for the Nebraska Department of Administrative Services.
Those employees would get a raise if the initiative passes, but the state also likely would have to make adjustments to salaries of people at higher wage levels to compensate for the new minimum.
"Because of this, it’s difficult to put a monetary amount on the budgetary impact of such a change," he said.
The city of Lincoln has only two permanent workers who make less than $15 an hour, but it has more than 550 seasonal and temporary workers below that threshold, said Human Resources Director Barb McIntyre.
McIntyre said the city had already been looking at bumping up pay rates for seasonal workers because it's been having trouble hiring enough of them. An example of that was a lifeguard shortage this summer that caused several city pools to have to close on certain days or shorten their hours.
Still, she said the city has not done any budget projections to look at what the implications of an increased minimum wage might be.
Another significant pool of public sector workers are people who work at schools and colleges, thousands of whom make less than $15 an hour.
The University of Nebraska system only has 161 regular full-time employees across all of its campuses who make less than $15 an hour. But it has about 1,700 temporary workers, such as people who work at athletic events, and more than 6,900 student workers who make less than that.
NU spokeswoman Melissa Lee said the university has calculated its budget for student worker pay would increase by $3.9 million a year, or about 23% over this year's budget of $17 million, if the minimum wage rises to $15 an hour.
"That would require us to manage the increases internally within our budget (by making cuts or raising fees), or reduce the number of student worker opportunities," said Lee, who emphasized that NU has taken no official position on Initiative 433.
Lincoln Public Schools currently has a couple thousand employees making less than $15 an hour, the vast majority of those seasonal or temporary workers.
LPS did not offer a comment on how a minimum wage increase might affect its budget.
Goss said he does believe an increase in the minimum wage will have significant impacts for governments and universities.
"It will cost state and local governments more due to the racheting up (of) the hourly wage," he said. "Likewise, it will impact colleges that depend on the use of students working for minimum wage."
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