04/16/2009 08:30 AM House FINANCE

CS FOR SENATE BILL NO. 1(FIN)                                                                                                 
                                                                                                                                
     "An Act increasing the minimum hourly wage; and                                                                            
     providing for an effective date."                                                                                          
                                                                                                                                
MICHELLE SYDEMAN, STAFF, SENATOR  BILL WIELECHOWSKI, SPONSOR,                                                                   
reported that the bill's sponsors  are Senators Wielechowski,                                                                   
Ellis,  Thomas,   Davis,  and  French.    She   noted  strong                                                                   
bipartisan support  for the bill,  which proposes  two modest                                                                   
increases in  the state's minimum  wage.  The  first increase                                                                   
would take place  on July 24 when Alaska's  minimum wage will                                                                   
fall under  the federal  minimum which rises  to $7.25.   The                                                                   
increase  would  make  Alaska's  minimum wage  equal  to  the                                                                   
federal wage.  The second increase  would become effective on                                                                   
January 1, 2010, when Alaska's  minimum wage would rise to 50                                                                   
cents above the federal wage equaling $7.75 per hour.                                                                           
                                                                                                                                
Ms. Sydeman  reported  that the sponsors  believe that  these                                                                   
small  increases   are  appropriate   for  several   reasons.                                                                   
Alaska's cost of living is one  of the highest in the nation.                                                                   
Despite this  fact, Alaska's  minimum wage  is the  lowest on                                                                   
the West  Coast and  lower than  19 other  states.   In July,                                                                   
Alaska's wage will be lower than 39 other states.                                                                               
                                                                                                                                
Ms. Sydeman shared statistics about Alaska's wage earners.                                                                      
                                                                                                                                
8:41:51 AM                                                                                                                    
                                                                                                                                
Ms.  Sydeman  stressed that  it  is  important to  note  that                                                                   
Alaska law currently  exempts employees under  age 18 working                                                                   
30 hours or less  a week from the state's minimum  wage.  One                                                                   
question  many  people ask  is  whether  an increase  in  the                                                                   
minimum wage  would result  in job loss.   She gave  examples                                                                   
dispelling  that  idea.   She  listed economic  studies  that                                                                   
support minimum wage increases.   She related the benefits to                                                                   
Alaskans  if  the  minimum  wage is  increased.    She  urged                                                                   
support of the bill.                                                                                                            
                                                                                                                                
8:43:47 AM                                                                                                                    
                                                                                                                                
GEORGE  SCHAAF,   EXECUTIVE  DIRECTOR,  TRAIL   MIX,  JUNEAU,                                                                   
testified in  strong support of SB  1.  He explained  how his                                                                   
employees  are currently paid  the minimum  wage of  $7.15 an                                                                   
hour.  He  described the job  duties of his trail  crew which                                                                   
often  lead to  better  jobs in  construction.   He  strongly                                                                   
encouraged passage  of the bill in light of the  high cost of                                                                   
living in Alaska.                                                                                                               
                                                                                                                                
8:46:27 AM                                                                                                                    
                                                                                                                                
Vice-Chair Thomas  corrected that  the tourism industry  pays                                                                   
well.   Mr. Schaaf agreed.                                                                                                      
                                                                                                                                
Representative  Fairclough  asked if  Trail  Mix  was a  non-                                                                   
profit.  Mr.  Schaaf said it was.  Representative  Fairclough                                                                   
wondered if the city contracts  with Trail Mix.  He explained                                                                   
his connection  with the CBJ,  which has an exception  in the                                                                   
municipal  code for trail  construction due  to lack  of bids                                                                   
and is tied  to the minimum wage.  Representative  Fairclough                                                                   
pointed out increased  costs to the state  and municipalities                                                                   
due to raising the minimum wage.   Mr. Schaaf pointed out the                                                                   
significantly higher cost of hiring  someone else to do trail                                                                   
work.                                                                                                                           
                                                                                                                                
8:47:55 AM                                                                                                                    
                                                                                                                                
GLENN  BRADY,   OWNER,  SILVER   GULCH  BREWERY,   FAIRBANKS,                                                                   
testified  via  teleconference   in  support  of  a  proposed                                                                   
Amendment  1   related  to  tip  credit.     Co-Chair  Hawker                                                                   
explained  that the  amendment  had not  been  offered.   Mr.                                                                   
Brady reported  that his  industry is in  favor of  a minimum                                                                   
wage increase, but with a fair tip credit.                                                                                      
                                                                                                                                
8:49:37 AM                                                                                                                    
                                                                                                                                
Representative Crawford asked  Mr. Brady how it would work in                                                                   
restaurants  where  all  the  tips are  pooled.    Mr.  Brady                                                                   
related that the IRS requires  employees to report their tips                                                                   
as  wages.   It  is  a  simple accounting  procedure.    Most                                                                   
bussers do not make minimum wage  so the bill would not apply                                                                   
to them.                                                                                                                        
                                                                                                                                
Representative Crawford  questioned whether bussers  and dish                                                                   
washers made minimum wage.  Mr.  Brady clarified that bussers                                                                   
and dish washers make more than minimum wage.                                                                                   
                                                                                                                                
8:51:59 AM                                                                                                                    
                                                                                                                                
DAMIAN THOMAS, BUSINESS  REPRESENTATIVE, LABORERS  LOCAL 942,                                                                   
FAIRBANKS,  via teleconference,  spoke against the  potential                                                                   
Amendment 1 regarding  tip credit.  He testified  in favor of                                                                   
raising the minimum  wage.  He felt that waiters  deserve all                                                                   
the tips they earn.                                                                                                             
                                                                                                                                
8:54:41 AM                                                                                                                    
                                                                                                                                
CHRYSTAL  SCHOENROCK,  BUSINESS  OWNER, CHARR,  NFIB,  KENAI,                                                                   
testified  via  teleconference  in agreement  with  potential                                                                   
Amendment 1.                                                                                                                    
                                                                                                                                
8:56:48 AM                                                                                                                    
                                                                                                                                
KOKAYI NOSAKIHERE, STUDENT, UNIVERSITY  OF ALASKA, ANCHORAGE,                                                                   
via teleconference,  informed the  Committee that  there were                                                                   
251 people who have signed a letter in support of the bill.                                                                     
                                                                                                                                
8:59:01 AM                                                                                                                    
                                                                                                                                
TAMMY GRIFFIN,  CHAIR, ALASKA HOTEL AND  LODGING ASSOCIATION,                                                                   
via teleconference,  made the  point that most  employees are                                                                   
not at minimum  wage unless tips  are included.  She  gave an                                                                   
example.   The employees  that receive  tips are the  highest                                                                   
paid employees  in the  hospitality industry.   She  spoke in                                                                   
favor of accepting Amendment 1  regarding the tip credit.  If                                                                   
that was included, she reported  being in favor of increasing                                                                   
the minimum wage.                                                                                                               
                                                                                                                                
The meeting  was recessed  to the call  of the chair  at 9:03                                                                   
AM.                                                                                                                             
                                                                                                                                
4:49:16 PM