July 1, 2002
Release 02151

KNOWLES SIGNS MINIMUM WAGE BILL
Vetoes Bill Cutting Wages for Many Alaska Seafood Workers

Available Media: HB 56 MP3 Audio | HB 504 MP3 Audio | JPEG Photos

ANCHORAGE - At the Midtown Job Center where the State provides job support services to Alaskans every day, Gov. Tony Knowles today signed into law a bill increasing Alaska's minimum wage and tying it to the Consumer Price Index measure of inflation to ensure that wages keep pace with rising prices.

"All workers deserve decent, livable wages," Knowles said as he signed House Bill 56. "Raising the minimum wage not only benefits our workers, but also the long-term growth and stability of the state's economy. Putting more money into the hands of hard-working Alaskans is good for all of us."

The new law, which will directly affect more than 14,000 workers who are currently earning hourly wages less than $7.15, ties in directly with Alaska's welfare reform efforts by ensuring that work pays better than welfare. The bill raises the minimum wage to $7.15 and requires it to increase along with the Consumer Price Index measure of inflation.

Knowles recalled the long and arduous path that brought the legislation to his desk. In his January 2001 State of the State speech, Knowles called on the Legislature to increase the state minimum wage over two years to $7.15 an hour and tie it to the national inflation rate in subsequent years. When Knowles proposed raising Alaska's minimum wage, it was the lowest on the West Coast - a pitiful $5.65 an hour.

Majority legislators quickly jumped on the bandwagon. But the wagon hit a rock when some restaurant owners asked for a "tip credit," something Knowles - a restaurant owner himself - opposed because it unfairly penalized workers in the food services industry.

The AFL-CIO got the wagon moving again by collecting more than 50,000 signatures to place an initiative on the November 2002 ballot that matched Knowles' call. Sponsored by labor leaders Mano Frey, Jim Sampson and Bruce Ludwig on behalf of the AFL-CIO, the initiative spurred majority lawmakers to act. By passing a substantially similar law, they could remove the initiative from the fall ballot, something they strongly wanted to do. But first they had to fend off challenges from within the Republican Party trying to weaken the bill by tying it to just 50 percent of the inflation rate, which would have forced minimum wage workers to lose ground every year.

"But let's be honest: they did the right thing, but their reasons may not have been entirely altruistic," said Knowles as he reflected on the bill's history. "Some people said they just didn't want thousands of low-wage workers coming to the polls and likely supporting their opponents."

Knowles vetoed a related bill that would have negated the minimum wage increase for workers in remote seafood processing plants by allowing employers to charge them for room and board. Docking the cost of room and board from a worker's pay is a practice that has been banned since Alaska became a state.

"Lots of hard-working Alaska families rely on those jobs, which contribute to the economy of our state and add value to our natural resources. They rightfully should benefit from an increase in the minimum wage," said Knowles as he vetoed House Bill 504. More than 700 western Alaska residents worked for seafood processors in 2000, and the percentage of Alaskans working in this industry grew from 24 to 30 percent between 1994 and 2000.

The Salvador family of Anchorage, which has worked in the seafood processing industry in Kodiak, Valdez, Dutch Harbor, Uganik Bay, and Anchorage for many years, was present at the ceremony to show support for Knowles' veto. If the bill had become law, hard-working families like the Salvadors would have watched their wallets shrink as their take-home pay dropped rather than rising with the new minimum wage standard.

"Families like the Salvadors rightfully should benefit from an increase in the minimum wage," said Knowles as he vetoed the bill.

Contact:
Bob King - Press Secretary (907) 465-3995
Julie Penn - Deputy Press Secretary (907) 465-3996