Voter-approved minimum wage increase takes effect

Nevada's minimum wage will increase by 70 cents on July 1 as part of an annual adjustment required by a 2006 amendment to the Nevada Constitution.

Nevada Labor Commissioner Michael Tanchek announced the upcoming change on Thursday.

"The adjustment for this year captures the third and final installment of the $2.10 increase in the federal minimum wage that went into effect in 2007," Tanchek said.

The increase will include moving the minimum wage from $6.55 to $7.25 an hour for employees who get employer health benefits, and $7.55 to $8.25 an hour for those who do not.

More Nevada employers also will see an increase in the threshold for daily overtime pay, which is tied to the minimum wage, Tanchek said.

"As the minimum wage goes up, so does the daily overtime requirement," he said. "As a result, some employers who are not currently paying daily overtime will have to do so once the new threshold rates go into effect on July 1."

The announcement prompted the Employment Policies Institute, a non-profit research organization in Washington, D.C., to condemn the Constitutionally mandated and voter-approved wage increase, saying since the state began raising the minimum wage its unemployment rate also has increased. It called the wage increase "a proven loser."

"With an economy that relies heavily on tourism, the last thing struggling retail and restaurant owners need is a new wage mandate that will cut both employment and their bottom line," said Michael Saltsman, a research fellow at the organization.

Elliott Parker, an economist at the University of Nevada, Reno, said that while a wage increase during a recession may hurt employers, the argument that minimum wage caused an increase in the unemployment rate "is pretty weak."

"If this relationship was causal, rather than coincidental, then our job losses would have only occurred in the lowest wage categories," Parker said. "But people at every income level have suffered. ... Minimum wages apply to less than 5 percent of workers."

He added that Nevadans approved the wage increase in 2006 as a political response to stagnating wages during a growing economy.

"They do have a negative, but still not very big effect on unemployment," Parker said. "Minimum wages in the U.S., however, did not keep up with inflation for many years, and in 'real' terms there is still a lot of room to catch up to where they were in the 1960s."