Limits to state minimum wage advanced after cloture vote

After eight hours of first-round debate, senators advanced a bill April 1 that would limit scheduled increases to the state’s minimum wage and establish a separate, lower wage for young Nebraskans.

Nebraskans voted at the November 2022 general election to increase the state minimum wage incrementally to $15 per hour by Jan. 1, 2026. Once the minimum wage, currently $13.50 per hour, reaches $15 it is set to adjust annually based on the Midwest Consumer Price Index to account for cost-of-living increases.

LB258, as introduced by Lincoln Sen. Jane Raybould, instead would increase the wage by the lesser of 1.5% or the CPI beginning Jan. 1, 2027.

The bill also would establish a youth minimum wage of $13.50 per hour for employees ages 14 and 15 and adjust the 90-day training wage for new employees under age 18 to $13.50 per hour through Dec. 31, 2026. The training rate then would be set at 75% of the state’s minimum wage.

The youth minimum wage would not apply to emancipated minors.

A Business and Labor Committee amendment instead would increase the training wage by 1.5% annually for new employees younger than 20. The amendment also would increase the newly established youth minimum wage by 1.5% every fifth year beginning Jan. 1, 2030.

Raybould said the minimum wage cap proposed in LB258 is based on the average CPI rate between 2010 and 2020. She said the bill is not intended to defy the will of the voters, but instead to provide predictability to business owners and encourage employment of young Nebraskans.

One study of the impact of minimum wage increases on the restaurant industry found that every 10% increase in the minimum wage resulted in a 2.2% decrease in employment growth for teenagers over a three-year period, Raybould said.

“[LB258] puts some commonsense fiscal guardrails [in place] going forward so that our businesses can continue to employ our fellow Nebraskans and stay open,” she said.

Sen. Ben Hansen of Blair supported the bill. He said rising business costs associated with minimum wage increases often lead to a reduction in scheduled work hours, which in turn results in a lower monthly income for employees.

“While the idea of setting a wage floor to protect low-income workers sounds compassionate,” Hansen said, “in practice, it has serious unintended consequences.”

Omaha Sen. Kathleen Kauth also supported the proposal, saying young workers are prohibited by law from performing certain tasks and in the number of hours they can work during the school week.

“If you are not allowed by the federal government to do the full job, you should not get the full wage,” Kauth said.

Lincoln Sen. Danielle Conrad introduced a number of unsuccessful procedural motions to extend debate on LB258, noting that previous voter-approved minimum wage increases, dating back to 2007, have not resulted in increased unemployment or significant job losses.

She also expressed concern about the impact a youth minimum wage could have on young parents and those working to help support their families. Over 54% of people earning minimum wage have a family income of less than $50,000 annually, Conrad said, and 21% of all minimum-wage workers are parents.

“We shouldn’t push young workers and young families further down the economic ladder when they’re trying to raise themselves up,” Conrad said. “Young workers bring the same value to consumers and the businesses as do older workers.”

Also opposing the bill was Sen. Megan Hunt of Omaha, who said mandating a separate minimum wage for young workers would be discriminatory and unfair.

Hunt said the Age Discrimination in Employment Act protects individuals over age 40 from employment and wage discrimination due to their age and perceived abilities and the same protections should be provided to younger workers.

“If we believe that age alone isn’t a fair determinant of someone’s value or productivity later in life,” she said, “why do we believe it is earlier in life?”

Omaha Sen. John Cavanaugh said the minimum wage cap outlined in LB258 would be a “fundamental divergence” from the inflation-based increase passed by voters.

In addition, he said, the proposed cap would not take into account the most recent rates of inflation, including a rate of 8% in 2022, which have lowered the CPI average considerably and eroded the value of the minimum wage.

After eight hours of general file debate, Raybould offered a motion to invoke cloture, which ends debate and forces a vote on the bill and any underlying amendments.

The motion was adopted on a 33-16 vote. Thirty-three votes were needed, the same number that will be required to pass LB258. Laws that would alter voter-approved initiative measures require a two-thirds majority for final approval.

Lawmakers then voted 33-9 to adopt the committee amendment before advancing LB258 to select file on a vote of 32-17.