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Nebraska Minimum Wage Increase Initiative (2014)

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The Nebraska Minimum Wage Increase Initiative may appear on the November 4, 2014 ballot in Nebraska as an initiated state statute. The measure, upon voter approval, would incrementally increase the state's hourly minimum wage to $9 by January 1, 2016.[1]

The following are the increments in which the minimum wage would increase:[1]

  • Increase from $7.25 to $8.00 on January 1, 2015
  • Increase from $8.00 to $9.00 on January 1, 2016

Nebraskans for Better Wages, the leading campaign organization supporting the initiative, submitted 134,899 signatures to get the measure on the ballot on July 3, 2014.[2]

Background

LB 943

Sen. Jeremy Nordquist (NP-7) introduced Legislative Bill 943 (LB 943) into the Nebraska Senate on January 16, 2014.[3] LB 943 was designed to incrementally increase the state's hourly minimum wage to $9 by January 1, 2017.[4] The bill came to an impasse when senators evenly split in support of and opposition to LB 943. Twenty senators voted for and twenty voted against the legislation. AP reported that none of the twenty opponents explained why they opposed the bill. Sen. Nordquist took note, saying, "I'm disappointed, and I think the biggest thing that I'm disappointed in is that no one who was an opponent to the bill stood up and said why they're opposed."[5]

Sen. Bill Kintner (NP-2) later called the bill's defeat "a victory for free-market capitalism."[5] He elaborated, "For 49 people to sit in here and say what somebody is worth to a business... is ridiculous."[6]

The Nebraska Chamber of Commerce opposed the bill.[7]

Following the legislation's defeat, Sen. Nordquist said he was working with allies to put the measure on the ballot as an initiative. He stated, "It’s just a matter of pulling the resources together. It certainly is something we can accomplish."[7]

Support

Nebraskans for Better Wages 2014.png

Sen. Nordquist (NP-7) launched a supporting campaign organization known as Nebraskans for Better Wages.[8]

FieldWorks, a campaign consultant business specializing in ballot initiatives, was hired by proponents for nearly $250,000.[9]

Don Walton, a journalist for the Lincoln Journal Star, said the ballot initiative could "emerge as a factor in the gubernatorial race" and benefit gubernatorial candidate Chuck Hassebrook (D).[10] Professor John Hibbing, a political scientist, of the University of Nebraska - Lincoln elaborated, "Democrats always face an uphill battle (in Nebraska). So, they would be delighted with anything that could provide a boost and you know I think at least this issue has the potential to do that."[11]

Gov. Dave Heineman (R) did not endorse the initiative, saying he had some reservations, but did conclude, "It's probably time that we've had [sic] an adjustment in the minimum wage, so it's going to be up to the people."[12]

Supporters

Officials

Former officials

  • Former US Rep. John Cavanaugh (D-2)[13]
  • Former Omaha Mayor Mike Fahey (D)[15]

Organizations

Individuals

Arguments

Nebraskans for Better Wages provided the following information in support of the measure on their website:

Working hard and taking care of one another are Nebraska values. Yet, despite working hard, families are falling behind. By raising the minimum wage, we can affirm the dignity in a hard day’s work, rebuild the middle class and help families earn enough to meet their basic needs. Hard work should pay in Nebraska.

The Need

While Nebraskans place a significant value on hard work, the economy has changed in a way that has left too many Nebraska families behind. Our middle class is shrinking; the median household income in Nebraska has declined by 5% over the past decade. More and more families are joining the ranks of those struggling paycheck to paycheck to make ends meet. Consider the following:

Nebraska’s current minimum wage is $7.25 per hour. At this wage level, a worker working 40 hours a week, 52 weeks a year, earns $15,080. This is below the federal poverty line for families of two or more.

In 2012, 32,000 hourly workers in Nebraska earned the minimum wage.

In 2012, Nebraska had the 2nd highest percent of hourly workers earning at or below minimum wage when compared with surrounding states.

The federal minimum wage would be $10.56 if it had kept pace with inflation over the past 40 years.

Increasingly, adults are spending their careers in low-wage jobs, struggling to support their families. In fact, 88% of America’s low-wage workers are over the age of 20.

The Benefits

Raising the minimum wage is a crucial part of rebuilding Nebraska’s middle class. An increased minimum wage has the potential to benefit employees, employers and our state’s economy.

Benefit to Employees: Raising the minimum wage by just 10% would reduce poverty by 2.4%.
Benefit to Employers: Raising the minimum wage reduces employee turnover and increases employee productivity.
Benefit to State Economy: For every $1.00 in wage increase for a minimum wage worker, there is an estimated $2,800 in new consumer spending by the worker’s household over the next year.

[19]

—Nebraskans for Better Wages, [20]

Sen. Jeremy Nordquist (NP-7), who initiated the minimum wage measure, wrote an op-ed in the Omaha World‑Herald. The following is an excerpt from his opinion article:

Jobs must pay enough for workers to meet their basic needs — like paying for a doctor visit or putting gas in the car. At the current minimum wage, a full-time salary is about $15,000 per year, far below what workers need to support themselves and their families in any community in Nebraska.

Our citizen petition would ensure a strong Nebraska economy that works for everyone. A study conducted by the Federal Reserve Bank of Chicago found that every $1 increase in the minimum wage results in $2,800 in new spending per household over the next year.

Boosting workers’ wages would increase consumer spending; this would be good news for Nebraska businesses because it would in turn increase demand for their goods and services.

Contrary to assertions by opponents of increasing the minimum wage, the weight of economic research shows little to no job loss in response to modest increases in the minimum wage. In fact, Washington State, which has the highest minimum wage in the country, also had the most robust small-business job growth last year among all states.

Our citizen petition would benefit Nebraska families. Minimum-wage jobs are not just for teenagers. The average minimum-wage worker is 35; most work full-time; more than one-fourth are parents; and, on average, they earn half of their families’ total income. Without an opportunity to vote on this critical issue, hardworking Nebraskans and their families will continue to fall behind.

Our citizen petition would strengthen Nebraska children and be important for our state’s future. Family income is a strong predictor of educational achievement…

As the percentage of children living in poverty has risen, more young students are coming to school with poverty-related challenges that have short- and long-term consequences for educational success. Teachers and parents need to be strong partners.

When parents work more than 40 hours per week at multiple low-wage jobs, it is hard for them to find the extra time to help their children with homework or read to them before bedtime, let alone participate in extracurricular activities and school functions.

These are serious challenges with serious consequences for our state’s future. Raising the minimum is a well-established solution that could have an immediate positive impact… [19]

—Sen. Jeremy Nordquist, [21]

Brian Depew, Executive Director of the Center for Rural Affairs, called on state citizens to approve the initiative:

Can you imagine supporting your family on an annual income of $15,080? In Nebraska, we ask too many people to do just that.

In 2012, we asked 32,000 Nebraskans to work for minimum wage. The average worker earning minimum wage in Nebraska is 35 years old. More than 25 percent are parents, and, on average, they earn half of their total family income. It is not just the teenager next door…

A modest boost in the minimum wage helps ensure that a fair day’s work earns an income sufficient to pay the rent, utilities and grocery bill. I couldn’t pay those bills on $15,080 per year. Could you?... [19]

—Brian Depew, [22]

Other arguments in favor of the initiative include:

  • Rick Poore, President of Designwear, stated, “It's much bigger then, ‘I am going to have to have a larger payroll.’ People are going to have to think a lot bigger than that. If they don't have the money, they’re not spending it and local businesses aren't selling as much. The thing is, I would be paying people who are more experienced, and I would be able to attract better people so that my product is good. It has good quality and has good value.”[18]

Campaign contributions

As of July 2, 2014, Nebraskans for Better Wages has received $721,396 in contributions.[23]

PAC info:

PAC Amount raised Amount spent
Nebraskans for Better Wages $721,396 $688,141
Total: $721,396 $688,141

Top 10 contributors:

Donor Amount
Richard D. Holland $350,000
Nebraska Appleseed Center for Law in the Public Interest $87,500
Dianne S. Lozier $50,000
Nebraska State Education Association $50,000
Normann Waitt, Jr. $30,000
Annette Smith $25,000
Barbara Weitz $25,000
Nebraska State AFL-CIO $25,000
Center for Rural Affairs $19,000
Matthew J. Johnson $10,000

Opposition

Opponents

Arguments

Nebraska Taxpayers for Freedom logo.png

Nebraska Taxpayers for Freedom is an organization dedicated to "the restoration and preservation of constitutionally limited government and our capitalist system, with emphasis on personal responsibility and freedom."[26] The organization issued a statement in opposition to raising the state's minimum wage. The following is an excerpt from their statement:

ECONOMIC FAILURE. A thorough review of 2 decades of economic research on the minimum wage by economists David Neumark and William Wascher, from the Federal Reserve Board, concluded that increases in the minimum wage reduce job opportunities for the lowest-skilled employees. Economist Joseph Sabia used data from the Census Bureau and Bureau of Economic Analysis to measure Gross Domestic Product (GDP) and employment response to an increased minimum wage. He proves that such hike negatively impacts GDP. For each 10% hike in a state minimum wage, teen employment decreased by 3.6%. Also, there is a 2-4% decline in the state GDP generated by workers in lower-skilled industries like warehousing. Proponents of raising a state minimum wage base their argument on the belief that only government can raise wages for minimum wage employees, that such employees receive wage hikes only when the minimum increases, perpetuating the fiction that such workers cannot increase their skill level and corresponding wages without government help...

CONSUMER PRICE INCREASES AND INFLATION. Workers earning a higher minimum wage will only see their higher take home pay eaten by consumer inflation and less buying power from working fewer hours. Many minimum wage workers will see their living standards drop...

WORK FORCE CUTS AND REDUCED HOURS. Retailers will reduce staff and replace humans with machines, reduce fringe benefits like health insurance, and restrict personal and sick leave options. To cut costs, employers will allow fewer breaks and amenities like free coffee and snacks. Employees in the hotel, motel, and fast food industries will suffer reduced work hours and job elimination, the very people who have no skills to obtain other employment. Stiff competition in these sectors make it impossible for employers to raise room rates or menu prices...

TEEN EMPLOYMENT RISKS. The NE teen (16-19) unemployment rate currently is 10.6%.5 Universities, which employ thousands of teens said an increase could trigger tuition hikes or result in their offering fewer employment opportunities. Teens will suffer most...

STYMIED JOB CREATION. A raise will curtail the number of entry level jobs created. Machines in fast food and other restaurants now can slice toppings like tomatoes and pickles and place them on burgers, assemble custom meat grinds of burger and pork, and utilize gourmet cooking techniques. Machines are more consistent, sanitary, and can make 360 hamburgers per hour. Machines take no sick days, require no health care, do not come to work loaded on drugs, and happily work 24 hours 7 days per week. Machines need only routine cleaning and maintenance...

BOGUS LIBERAL ARGUMENTS. ... Liberals ignore that some they supposedly champion lack the will and initiative to access higher-paying jobs. Likewise, liberals who claim that a higher minimum wage would impel people to abandon welfare ignore that some welfare recipients enjoy that lifestyle and would never leave it.

MORE TAXES. Those granted higher wages will pay higher sales and excise taxes as they spend more money. If they save and earn interest, they will pay more income tax. They will pay higher Social Security and Medicare taxes. All these higher taxes will erode their wage increase. Government at all levels will accrue billions in additional tax revenue... [19]

—Nebraska Taxpayers for Freedom, [27]

Ron Tillery, executive director of the Fremont Area Chamber of Commerce, said fair compensation is not an issue of minimum wages, but skills and education. He wrote:

Let us first state the obvious: Skilled working Americans deserve to be compensated fairly giving consideration to the value they deliver to employers in a competitive marketplace.

Then why would we advise against increasing Nebraska’s minimum wage as a recent petition initiative proposes? The answer is grounded in common sense: the minimum wage is intended to function as a platform for development of unskilled job learners. It is a starting point where employers make investments in employee development, which often carries risk for an employer. It is not, as some have suggested, a tool intended to lift families out of poverty...

We agree with our partners at many other Nebraska Chambers of Commerce that more effective solutions for those who are not fully benefiting from Nebraska’s vibrant economy are education and better training. They’re not new concepts but ones that should get universal support and higher priorities... [19]

—Ron Tillery, [28]

Other arguments against the initiative include:

  • Doug Kagan, president of the Nebraska Taxpayers for Freedom, stated, "When you raise the minimum wage, that takes investment capital away from the businesses that they otherwise would use to train and educate entry level workers."[29]
  • Bob Hallstrom, a lobbyist for the Nebraska Federation of Independent Business, argued, "Anytime you look at an increase in the minimum wage, particularly on the heels of a recession, it's a concern for small businesses that are struggling. The minimum wage, pure and simple, adds cost to their bottom line."[9]
  • The Platte Institute for Economic Research noted that nearly half of workers earning minimum wage in Nebraska are under the age of 24. They said minimum wage jobs are "low wage," but "short term," and help young people acquire skills and credentials for higher-paying jobs.[7]

Reports and analyses

Congressional Budget Office

The Congressional Budget Office (CBO) issued a report on the “principle effects” of increasing the minimum hourly wage to $9.00 or $10.10. An increase to $10.10, they concluded, would have a more substantial effect on wages and employment than $9.00. The CBO made the following conclusions about raising the minimum wage:

  • An increase to $9.00 would reduce total employment by about 100,000 and an increase to $10.10 by approximately 500,000. The CBO postulated that this would happen because employers would raise commodity prices to offset wage increases.
  • An increase may be accompanied by reductions in real-income due to inflation and higher consumer prices.
  • The aggregate income, after increases and losses, would still be net positive for low-income families. The aggregate would be an increase of $2 billion.
  • A minimum wage hike to $10.10 would boost an average family's income by about three percent.
  • The hike would also move about 900,000 people above the poverty line. Currently, 45 million people live below the poverty line.
  • Raising the minimum wage would cause a small decrease in federal budget deficits for several years following.

To read the full report, see here.

Path to the ballot

See also: Laws governing the initiative process in Nebraska

In order to qualify the proposed initiated statute, supporters were required to collect valid signatures totaling a minimum of 7 percent of registered voters by July 4, 2014. In addition, signatures needed to be collected from 5 percent of the registered voters in 38 of the 93 Nebraska counties.[30]

On July 3, 2014, proponents submitted 134,899 signatures to the secretary of state's office.[2] Since 1,154,790 people were registered to vote in Nebraska on July 3, 2014, 80,386 valid signatures were required for certification.[31]

Similar measures

The following measures related to minimum wage increases were proposed for the general election ballot in November:

See also

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Suggest a link

External links

Basic information

Support

Opposition

References

  1. 1.0 1.1 Nebraska Secretary of State, "Initiative Petition," accessed July 2, 2014
  2. 2.0 2.1 Omaha World Herald, "Petition drive to raise Nebraska's minimum wage has more than 130,000 signatures," July 4, 2014
  3. Nebraska Legislature, "LB943 History," accessed July 2, 2014
  4. Nebraska Legislature, "LB943 Text," accessed July 2, 2014
  5. 5.0 5.1 Huffington Post, "Bill Raising Nebraska's Minimum Wage Stalls In Legislature," April 1, 2014
  6. Omaha World-Herald, "Proposed raise in Nebraska's minimum wage fails to advance," accessed July 2, 2014
  7. 7.0 7.1 7.2 Nebraska Watchdog, "Will minimum wage increase go on Nebraska ballot?," April 7, 2014
  8. Nebraskans for Better Wages, "Homepage," accessed July 2, 2014
  9. 9.0 9.1 9.2 9.3 9.4 9.5 Omaha World‑Herald, "Effort to raise Nebraska minimum wage moving fast," June 9, 2014
  10. Lincoln Journal Star, "Don Walton: Minimum wage could impact election," July 6, 2014
  11. Nebraska Radio Network, "Political science professor says min. wage issue could benefit Democrats," July 8, 2014
  12. KETV 7, "Governor says minimum wage likely to pass," July 9, 2014
  13. 13.0 13.1 Sioux City Journal, "Minimum wage increase headed for ballot," July 4, 2014
  14. The Omaha World Herald, "In Omaha, bus tour calls for hourly minimum wage over $10," April 25, 2014
  15. The Omaha World Herald, "Will minimum wage petition net enough signatures to make ballot?," July 3, 2014
  16. Center for Rural Affairs, "Nebraska Needs A Raise - Center announces support for ballot initiative to raise minimum wage," June 20, 2014
  17. Voices for Children in Nebraska, "Raising Future Generations and the Minimum Wage," June 19, 2014
  18. 18.0 18.1 KETV, "Business owner rallies for increase in minimum wage," April 8, 2014
  19. 19.0 19.1 19.2 19.3 19.4 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributed to the original source.
  20. Nebraskans for Better Wages, "Why Raise the Minimum Wage?," accessed July 2, 2014
  21. Omaha World‑Herald, "Midlands Voices: Raising minimum wage can help families, economy," June 22, 2014
  22. The Grand Island Independent, "Minimum wage about fairness, opportunity," July 2, 2014
  23. Nebraska Accountability and Disclosure Commission, "Nebraskans for Better Wages B-1," accessed May 26, 2014
  24. Nebraska Watchdog, "Lawmaker: Petition drives too hard, even that minimum wage push he opposes," July 9, 2014
  25. KLIN, "Supporters and Opponents Readying To Battle Minimum Wage Increase," July 7, 2014
  26. Nebraska Taxpayers for Freedom, "Who We Are," accessed July 11, 2014
  27. Nebraska Taxpayers for Freedom, "Case Against Raising the State Minimum Wage," accessed July 11, 2014
  28. Fremont Tribune, "Skills, not a minimum wage, fight poverty," July 23, 2014
  29. ABC 8, "Nebraska Taxpayers For Freedom fights minimum wage hike," July 8, 2014
  30. Nebraska Secretary of State, "House to Use the Initiative and Referendum Process in Nebraska," June 2013
  31. The Republic, "Nebraska officials say 80,386 signatures needed to put minimum wage increase on ballot," July 7, 2014