So far, the $15 minimum wage fever has been contained to the liberal West Coast and a few progressive East Coast and Midwest cities until yesterday when the governor of Kentucky unilaterally raised the minimum wage for certain state employees to $10.10 per hour. Not surprisingly, conservatives and the business community are concerned.

Governor Steven Beshear has taken a page from President Obama’s playbook in not waiting on the state legislature to act upon a stalled bill that would have raised the minimum wage for all employees statewide to $10.10. The bill passed the Democratic-controlled House but won’t go anywhere in the Republican-held Senate. Like POTUS’s rule-by-pen strategy, Beshear’s tactic didn’t include trying to get his conservatives colleagues on board, but plowed ahead with his agenda instead. President Obama's bully pulpit worked – too bad it wasn't for long-term good.

The governor was able to use his pen to hike the minimum wage only for government workers and contractors who do business with the government.  The raise in minimum wages is a big jump from the current hourly minimum of $7.25. When the increase takes effect in July, nearly 800 affected workers will get a boost in wages.  That’s just a small fraction, however, of the state’s reported more than 32,000 employees.

This move is meant to inspire action on the part of Democratic lawmakers in the state – and perhaps to snub Republicans. Beshear also had other governors in mind when he stepped out on this issue. 

The New York Times reports:

In a telephone interview on Monday, Mr. Beshear called on his fellow governors nationwide — particularly those with unsympathetic state legislatures — to follow suit with similar executive orders. “There are a number of states where the chief executive favors raising the minimum wage but has issues with their legislature in terms of getting a statewide minimum wage increase passed. I would certainly encourage them to take a step like this,” Mr. Beshear said.

In January, Pat Quinn, the departing Democratic governor of Illinois, signed an executive order raising the minimum wage for employees of state contractors, but it was rescinded by the new Republican governor, Bruce Rauner.

…

Mr. Beshear, whose second term ends in December, framed Monday’s action as a positive step he could take unilaterally before leaving office. As an executive order, though, the fate of the increase will probably be determined by his successor. Jack Conway, the state attorney general and this year’s Democratic nominee for governor, is generally supportive of minimum wage increases, while Matt Bevin, the Republican candidate, is opposed.

The Republican Senate president warned that costs associated with the increase will rack up to an estimated at $1.6 million annually by the governor’s office. Kentucky isn’t the richest state and its $9.7 billion budget is already stretched thin. I wonder what source Beshear has identified to pay for this raise.

As you know, West Coast cities such as Los Angeles, San Francisco, and Seattle have all raised their minimum wage to $15 per hour. Less than $15 per hour but still way above the federal and state minimum wages are Oakland at $12.25 and San Diego at $11.50. On the East Coast, there are proposals floating in New York and Washington, D.C., for a $15 minimum wage. In the mid-west Kansas City is considering joining the $15 minimum wage club, while Chicago settled on $13 per hour.

As large cities continue to explore a higher wage, we’ll see pressure on state legislatures to force employers to pay higher wages. Little is made of the expected impacts on businesses and how they will respond. It is likely that hiking the minimum wage will reduce jobs, as has often happened elsewhere where there are hikes. When your worker base shrinks, so does your tax base.

Minimum wage hike supporters have a friend in Beshear, and now they now also have a new spokesperson in Democratic presidential candidate Hillary Clinton, who teamed up with the Service Employees International Union (SEIU) – one of the largest unions and leading lobbyist groups – to whip up energy among their members to keep the pressure for a $15 minimum on. In her speech before what was described as a crowd of young, African American workers, Clinton noted, "All of you should not have to march in the streets to get a living wage, but thank you for marching in the streets to get that living wage… We need you out there leading the fight against those who would rip away Americans’ right to organize, to collective bargaining, to fair pay."

What Clinton and Beshear fail to communicate to these protestors and members is that a $15 minimum wage means nothing when you’re standing in the unemployment line because your boss responded to the raise in wages with a pink slip and automating your role.

Minimum wage is meant to be kept low because the market value of jobs that require a low level of skills is low. Such jobs are often entry level jobs with high turnover. The point is not to lift the wages for these jobs, but to help these low-skilled workers gain the skills they need to move to higher paying positions. Raising the minimum wage will shut many of these workers out of a job.