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Attempt to raise minimum wage in Utah doesn't gain traction

Published: Tuesday, Sept. 1 2015 6:49 p.m. MDT

John Jarvie changes a chain on a bike at bikewagon.com in North Salt Lake, Monday, March 3, 2014. (Ravell Call, Deseret News) John Jarvie changes a chain on a bike at bikewagon.com in North Salt Lake, Monday, March 3, 2014. (Ravell Call, Deseret News)

SALT LAKE CITY — Gordon Rose makes nearly double minimum wage as a lead shipper assembling bicycle parts and camping gear for customers at Bikewagon.

In fact, all of his co-workers also earn more than $7.25 an hour, Utah's current rate.

"It makes everyone happier,” he said. "They feel more invested in what they’re doing rather than just coming and clocking in and clocking out. They want to make a difference in the company."

A full-time worker and full-time student at the University of Utah, Rose said he wouldn't be able make it on minimum wage.

But he won't have any new company in earning more than that per hour, at least not anytime soon.

An attempt to raise Utah's minimum wage to $10.25 an hour didn't get much traction in a legislative hearing Monday, but state lawmakers are open to studying the issue.

Lucas Jensen pulls an order to be shipped at bikewagon.com in North Salt Lake, Monday, March 3, 2014. (Ravell Call, Deseret News) Lucas Jensen pulls an order to be shipped at bikewagon.com in North Salt Lake, Monday, March 3, 2014. (Ravell Call, Deseret News)

The House Health and Human Services Committee referred HB73 for possible study over the summer.

"This really is a complex issue. It's more than increasing the amount of wage someone earns," said Rep. Brian Greene, R-Pleasant Grove.

In addition to raising the minimum wage, Rep. Lynn Hemingway's bill would have given restaurant servers and those who work mostly for tips a $1 increase to $3.13 an hour. It would have applied only to workers ages 17 and older.

"This is not a support-your-local-teenager sort of a bill," said Art Sutherland, a volunteer for the Coalition of Religious Communities. The multifaith group of 16 denominations supports the bill.

Hemingway, a Salt Lake City Democrat, sees it as a living wage.

Daniel Lower packs up a wheel to ship at bikewagon.com in North Salt Lake, Monday, March 3, 2014. (Ravell Call, Deseret News) Daniel Lower packs up a wheel to ship at bikewagon.com in North Salt Lake, Monday, March 3, 2014. (Ravell Call, Deseret News)

"A living wage is one that, in my opinion, pulls people out of poverty. It doesn’t abandon them to it," he said.

Hemingway said a higher minimum wage would increase buying power, help the economy grow and keep families out of the social safety net.

But several lobbyists representing the business community said it would put people out of work, cause companies to shut down and drive prices up for consumers.

"This would have a chilling effect on us as employers," said Kate Bradshaw, representing Utah food industries and retail merchants.

Experience and ability should dictate pay, not government setting an artificial value on people, Bradshaw said.

Lucas Jensen packs up products to ship at bikewagon.com in North Salt Lake, Monday, March 3, 2014. (Ravell Call, Deseret News) Lucas Jensen packs up products to ship at bikewagon.com in North Salt Lake, Monday, March 3, 2014. (Ravell Call, Deseret News)

Candace Daly, the Utah director of the National Federation of Independent Business, said half of those who make minimum wage are under 26 and not the primary earners in their homes.

"This will destroy the jobs for those who are between 16 and 26," Daly said.

Hemingway acknowledged that there's a real possibility that people could lose their jobs. But he said there would be more money to feed into the economy with a higher wage.

"These are people who are going to spend this money. They're not going to put it in an account in Switzerland," he said.

Bikewagon owner George Majors starts shippers at $9 or $10 dollars an hour. He said he wanted to create a "lifestyle company" where employees would be happy.

Lucas Jensen packs up products to ship at bikewagon.com in North Salt Lake, Monday, March 3, 2014. (Ravell Call, Deseret News) Lucas Jensen packs up products to ship at bikewagon.com in North Salt Lake, Monday, March 3, 2014. (Ravell Call, Deseret News)

“We find that by paying them a little higher wage, we don’t have very much turnover,” Majors said.

Bikewagon has paid more than minimum wage since opening in 2004, he said.

If the minimum wage were to increase, Majors said Bikewagon would raise the income of their employees as well.

“It would impact us a little bit,” he said. “But I don’t think it would be a gigantic problem.”

Nic Dunn, Utah Department of Workforce Services spokesman, said a minimum wage change wouldn’t make a big difference in the long run.

Employers would initially feel the increased costs, which could mean fewer jobs or hours for those employed, he said.

Owner George Majors talks on the phone at bikewagon.com in North Salt Lake, Monday, March 3, 2014. (Ravell Call, Deseret News) Owner George Majors talks on the phone at bikewagon.com in North Salt Lake, Monday, March 3, 2014. (Ravell Call, Deseret News)

“In the short run, we may see some of that effect taking place,” Dunn said. “But in the long run, it will kind of even out.”

Lawmakers noted that state and local government would pay millions of dollars each year in higher wages under the bill.

Legislative fiscal analysts estimated it would cost state government about $3 million this year and as much as $25 million each year starting in 2015. It could cost county government $6 million to $10 million a year, they estimated.

Sen. Lyle Hillyard, R-Logan, the Senate budget chairman, said he couldn't support the bill because he doesn't know how the state would pay for it.

Utah State University graduate student Lindsey Herde has been supporting herself as a server at three restaurants the past six years. Her income comes exclusively from tips, and the $2.13 an hour pay goes directly to taxes.

John Jarvie changes a chain on a bike at bikewagon.com in North Salt Lake, Monday, March 3, 2014. (Ravell Call, Deseret News) John Jarvie changes a chain on a bike at bikewagon.com in North Salt Lake, Monday, March 3, 2014. (Ravell Call, Deseret News)

“Usually they send the check, that’s zero, zero, zero,” she said. “Serving pays well with tips. That’s why you do it. But off the hourly, nothing.”

Herde said one of her biggest worries is that her income isn't reliable. Some nights she’ll make $15 in four hours, while other nights she’ll make more than $100 in that time.

“I think anything higher would make a difference,” she said. “If someone stiffs me, I pay money because I still have to tip (bussers and bartenders) out of the total bill, even if they don’t tip me."

Herde said if the minimum wage were increased to $10.25, she might consider taking a different, more stable job to support herself.

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