Nevada Governor Vetoes Minimum Wage Bill

Nevada Governor Sandoval vetoed a minimum wage bill on June 8, that would increase the minimum wage for all workers in the region at $12. It was one of the half-dozen bills he vetoed while signing more than seventy others. Governor Sandoval said he wanted the state to reconsider its overtime laws if wages were going to be increased and cited concerns about how the minimum wage increase would hurt the state’s economy.

The Details of the Bill

The bill, SB 106, would have raised Nevada’s minimum wage as high as $12 an hour for some workers. Those with health insurance could be paid $11 while those without health insurance would have to be paid a minimum of $12 per hour. It would have raised the Nevada minimum wage by 75 cents per year through the year 2022. This is separate from Nevada’s already generous overtime laws. Today, Nevada employers must pay time-and-a-half to those who earn less than 150 percent of the minimum wage and work more than eight hours in a single 24-hour period or 40 hours a week. This means that someone working 12 hours for a single day in Nevada is paid overtime, even if they only work two days a week. Many employers hire those with a masters of accounting to maintain payroll because of unusual state laws like this.

Points in Favor of the Bill

The bill was one of the few proposals that linked minimum wage rates to health insurance coverage; the lower minimum wage only partially offset the cost of health insurance, but it avoided the economic decimation that comes with the double mandate of providing costly health insurance to low-wage workers and raising their wages. SB106 mirrors Nevada’s current incentives where employers can pay $7.25 per hour if they offer health insurance and $8.25 per hour if they do not.

Points against the Bill

Nevada has a very large service-based economy, serving tourists and gamblers from around the world. Raising the minimum wage would have hurt Nevada’s economy by raising prices for tourists, who have a much easier time going somewhere else. This argument is bolstered by evidence from California’s minimum wage increases. Every $1 increase in the minimum wage in California as a state or its municipalities caused a 4% to 10% increase in restaurant closures, while it simultaneously decreased the rate at which new businesses opened. Those earning a masters of accounting learn about how many businesses are adversely impacted by raising wage rates.

Alternative Legislation

Democrat lawmakers passed a different bill that has not been signed into law; this bill has to be reviewed in the 2019 legislative session. That proposal would put the minimum wage increase on the 2020 ballot. This proposed law would raise the minimum wage to $14 per hour in 2026 with gradual, annual increments.

Conclusion

Nevada’s governor rejected a proposed minimum wage increase citing concerns that it would hurt Nevada’s economy the way California’s minimum wage increase has hurt its service economy. Democrats have proposals for the next legislative session that could raise the minimum wage via a referendum, allowing them to circumvent the Governor if it doesn’t pass the legislature and get signed into law next term.

 

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