03/09/2009 03:15 PM House LABOR & COMMERCE

HB 29-ALASKA MINIMUM WAGE                                                                                                     
                                                                                                                              
CHAIR OLSON  announced that the  only order of business  would be                                                               
HOUSE  BILL NO.  29, "An  Act  increasing the  minimum wage;  and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
JENNIFER SENETTE, Staff, Representative  Kurt Olson, Alaska State                                                               
Legislature, provided a brief refresher  on the bill.  She stated                                                               
that HB  29 would raise  the minimum wage  in Alaska to  $7.15 or                                                               
$.50 higher than the federal minimum  wage.  She offered that the                                                               
federal minimum wage  is scheduled to be increased  in July 2009.                                                               
Alaska has historically had a  minimum wage that is approximately                                                               
$.50 higher  than the states  in the Lower  48.  This  bill would                                                               
effectively set Alaska's minimum wage at $7.75.                                                                                 
                                                                                                                                
MS. SENETTE  pointed out that  some confusion seemed to  exist at                                                               
the  last hearing  about  the  number of  Alaskans  who would  be                                                               
affected by  this bill.   She indicated that  approximately 9,000                                                               
Alaskans would benefit  from HB 29, which is  not necessarily the                                                               
number of people employed at the  minimum wage.  She offered that                                                               
the Department of Labor &  Workforce Development can provide some                                                               
additional information and details.                                                                                             
                                                                                                                                
3:21:06 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that  a suggested amendment  to HB  29 was                                                               
submitted  to the  House Labor  and  Commerce Standing  Committee                                                               
within  24 hours  of the  meeting.   He  related the  committee's                                                               
policy is to accept amendments  for consideration using a 24-hour                                                               
rule.    Thus,  the  amendment  will be  taken  up  at  the  next                                                               
committee meeting, he stated.                                                                                                   
                                                                                                                                
3:21:49 PM                                                                                                                    
                                                                                                                                
MS.  SENETTE, in  response  to  Representative Neuman,  explained                                                               
that Alaskans  who would be  affected by  the bill are  those who                                                               
earn less than $7.75 per hour.                                                                                                  
                                                                                                                                
REPRESENTATIVE NEUMAN asked for a  breakout of the industries for                                                               
the 9,000 employees who earn the minimum wage.                                                                                  
                                                                                                                                
3:23:59 PM                                                                                                                    
                                                                                                                                
BRIAN RAE, Economist, Research and  Analysis Section, Division of                                                               
Administrative   Services,  Department   of  Labor   &  Workforce                                                               
Development (DLWD),  stated that  he is  also supervisor  for the                                                               
Occupational Information unit.                                                                                                  
                                                                                                                                
REPRESENTATIVE NEUMAN inquired as  to the job classifications for                                                               
the Alaskans who are paid at the minimum wage level.                                                                            
                                                                                                                                
MR. RAE  answered that  in absolute  numbers of  people affected,                                                               
large numbers  of people in  the accommodation and  food services                                                               
of  the visitor  industry,  restaurants,  tourism related  retail                                                               
trade sector work  at minimum wage.  In terms  of the percentages                                                               
of  people   affected  within  an  industry,   he  indicated  the                                                               
industries would include  hotels, restaurants, and manufacturing,                                                               
such as the seafood processing industry.                                                                                        
                                                                                                                                
3:24:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   NEUMAN  asked   for  a   breakout  of   the  job                                                               
classifications for  those Alaskans who  are paid at  the minimum                                                               
wage level.                                                                                                                     
                                                                                                                                
MR. RAE explained that the estimates  are based on U.S. Bureau of                                                               
Labor statistics  prepared in cooperation with  the Department of                                                               
Labor  & Workforce  Development (DLWD).   He  explained that  the                                                               
wage survey  information figure of  9,000 minimum  wage employees                                                               
is  based on  a 2007  survey, which  is the  most current  survey                                                               
available.   Of those, approximately  3,400 people  were employed                                                               
in the  accommodation and food  services industry such  as hotels                                                               
and restaurants.   Another 1,100  employees were involved  in the                                                               
seasonal retail  trade, as well as  approximately 1,100 employees                                                               
employed in the educational services  such as private preschools.                                                               
He related that  approximately 20 industry groups  are tracked in                                                               
the public and private sectors.                                                                                                 
                                                                                                                                
MR. RAE, in response to  Representative Neuman, answered that the                                                               
total employment in Alaska is approximately 302,000.                                                                            
                                                                                                                                
REPRESENTATIVE  NEUMAN related  that  including  credit for  tips                                                               
earned would  affect about  3,400 people, or  about one  tenth of                                                               
one   percent  of   the  total   workforce.     He  related   his                                                               
understanding that  one concern  about excluding people  who earn                                                               
tips  from  the  bill  is   that  in  some  industries  tips  are                                                               
significant and  employees may earn up  to $40,000 per year.   He                                                               
surmised  that due  to the  downturn in  the economy  that people                                                               
will probably earn fewer tips.                                                                                                  
                                                                                                                                
MR.  RAE   offered  that  differences  exist   between  the  term                                                               
"industry" and  "occupation".  He  related that in the  hotel and                                                               
restaurant industries, not  all employees earn tips.   He further                                                               
related that in  examining the occupational groups  and those who                                                               
may  make  less  than  $7.15,  that one  of  the  largest  groups                                                               
includes waiters and  waitresses.  He estimated  that about 1,300                                                               
waiters and waitress occupations earn $7.15 or less.                                                                            
                                                                                                                                
3:28:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE NEUMAN related  that HB 29 may  change the minimum                                                               
wage for only 1,300 people.   He inquired as to the justification                                                               
to impose the minimum wage for such a small number of people.                                                                   
                                                                                                                                
CHAIR  OLSON  answered  that  the issue  of  whether  to  include                                                               
employees who earn  tips may be raised, but that  he hopes to add                                                               
one small amendment when HB 29 has another hearing.                                                                             
                                                                                                                                
3:30:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BUCH asked if Mr.  Rae could identify how many are                                                               
single family parents earn the minimum wage.                                                                                    
                                                                                                                                
MR.  RAE answered  no.   In  further  response to  Representative                                                               
Buch, Mr. Rae explained that he  could not identify the number of                                                               
households  that would  be affected  by the  bill.   He explained                                                               
that the  DLWD survey is  completed by employers who  only inform                                                               
the  department  the  level  of  salaries  that  they  pay  their                                                               
employees and not demographic data.                                                                                             
                                                                                                                                
3:31:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE BUCH asked  if he had any demographic  data on the                                                               
workers who earn minimum wages in Alaska.                                                                                       
                                                                                                                                
MR. RAE answered no.                                                                                                            
                                                                                                                                
3:31:20 PM                                                                                                                    
                                                                                                                                
CHRYSTAL  SCHOENROCK, Owner,  4Lands Bar,  stated that  she is  a                                                               
member  of the  state Cabaret,  Hotel, Restaurant,  and Retailers                                                               
Association  (CHARR)  and is  also  the  secretary of  the  Kenai                                                               
Peninsula  Alaska  Cabaret,   Hotel,  Restaurant,  and  Retailers                                                               
Association (CHARR),  and the National Federation  of Independent                                                               
Businesses (NFIB),  but that  she is  representing herself.   She                                                               
stated that  she just read  that Alaska's unemployment  is rising                                                               
and that  approximately 5,200  jobs are due  for layoffs  or have                                                               
already been  done.   She offered that  some oil  company support                                                               
companies  in her  area  such as  CH2M  Hill, and  ConocoPhillips                                                               
Alaska, Inc.  which means  that oilfield  jobs are  declining and                                                               
some are  rumored to lay off  additional employees in June.   She                                                               
said that  she did not  see how she could  afford to pay  more in                                                               
workers'  compensation,  state  unemployment, or  federal  taxes.                                                               
She offered  her belief that this  is not the time  to consider a                                                               
wage increase.   She noted other factors that  affect the numbers                                                               
of clients, such as the  nearby communities of Kenai and Soldotna                                                               
are currently attempting to ban  smoking in bars which may affect                                                               
her business.   She explained that her business  has already seen                                                               
a  ten percent  decrease.    She related  that  the oil  industry                                                               
layoffs will affect the economy.   She said, "It's going to hurt,                                                               
hurt us bad."                                                                                                                   
                                                                                                                                
3:34:26 PM                                                                                                                    
                                                                                                                                
CHAIR  OLSON,  after first  determining  no  one else  wished  to                                                               
testify, closed public testimony on HB 29.                                                                                      
                                                                                                                                
CHAIR OLSON announced  that HB 29 would be held  over for further                                                               
consideration.                                                                                                                  
                                                                                                                                
3:34:57 PM