A law passed by the Legislature last year to increase the minimum wage annually to adjust for inflation was reversed Friday by the state House of Representatives.
House Bill 199 was passed on a 24-14 vote, with Reps. Bruce Weyhrauch of Juneau, John Harris of Valdez, Paul Seaton of Homer and Bev Masek of Willow breaking ranks with the Republican majority and voting against the measure.
The bill now heads to the Senate, but with less than a week left in this year's legislative session, it is unlikely it will be approved this year.
The law passed last year increased the hourly minimum wage from $5.65 to $7.15 and instituted an automatic annual adjustment based on the Consumer Price Index or $1 above the federal minimum wage, whichever is higher.
The Legislature passed last year's law in response to a statewide citizens initiative to raise the minimum wage and adjust it annually for inflation. If the ballot initiative had passed, lawmakers would have had to wait two years before reversing the measure.
Rep. David Guttenberg, a Fairbanks Democrat, argued the decision by the House to reverse the annual wage-hike provision undermines the public process.
"Last year a group of ballot-initiative sponsors collected the signatures to put this ballot initiative on the ballot and let the people decide," Guttenberg said. "... Those 50,000 signatures that were gathered by those people were negated by the work that we did here when we passed legislation to replace the ballot. Gotcha, they fooled you, and now they're changing it back."
Rep. Norm Rokeberg, an Anchorage Republican who filed HB 199, argued that forced wage hikes lead to inflation and are bad for the economy.
"Because of these wage hikes employers are cutting off benefits such as health insurance and matches to 401k retirement-type plans," he said.
He said the wage hike passed last year has led to the closure of restaurants in Anchorage and has dissuaded other businesses from coming to the state.
"Additionally, a national chain - Outback Steakhouse - has testified ... they were considering opening outlets in the Fairbanks area, and because of this statement by the Legislature they have decided not to open there," Rokeberg said, referring to last year's law.
He said increases in the minimum wage should not be automatic but should be open for discussion by lawmakers and industry.
But Rep. Harry Crawford, an Anchorage Democrat, said an annual wage hike every year prevents businesses from having to endure large minimum-wage increases every five or six years.
"That is a burden on businesses to have such a steep hike all at once," he said. "If you go back to 1991, when the minimum wage was $4.75 ... we've raised the minimum wage up to $7.15 - that's a hike of $2.40. Had we gone with the Consumer Price Index over that time, it would have gone up $1.54."
Timothy Inklebarger can be reached at email@example.com.