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Minimum Wage Bill "Compromises" Creates Flaws

Category: Labor
Posted: 04/15/14 00:58

by Dave Mindeman

The compromises that occurred with the minimum wage legislation are very evident. The raw numbers are good and necessary, but the indexing portion has left enough ambiguity to throw a wrench to the works.

Some analysis done for MinnPost posted by David Brauer was especially disconcerting....

Had Monday's deal been in place since 1976 (the year lawmakers increased the state minimum to $1.80 an hour), the minimum wage would stand at just $3.91 today, not the current $6.15 (and all calculations assume a governor doesn't override annual increases, a power the deal grants).

Standard indexing was taken off the table and a lesser form of increases was established in law. This method will NOT keep up with inflation and periodic adjustments will, again, be necessary.

But Republican gubernatorial candidates seized on another provision that will almost certainly become a political football....

Under the DFL deal to raise the state's minimum wage to $9.50 per hour with an inflation index starting in 2018, Minnesota's Commissioner of the Department Labor and Industry can suspend indexing the wage for up to 12 months -- if leading economic indicators point to a "substantial downturn in the state's economy."

Since the Commissioner of DLI is appointed by the Governor, this will become an executive branch option on minimum wage.

This creates a scenario whereby Republican candidates (and the current ones have already stated this) will take the opportunity to halt wage increases for the low end of the wage scale - while Democratic governors will more than likely let the upward adjustment go through.

This will be another means of pitting business vs labor in our quadrennial race for chief executive of the state. Business will side with Republicans and Labor will side with the Democrats.

Now, if the GOP wants to establish a precedent that contends they will always be denying low wage earners any kind of raise, then that is the chance they will take in the electoral process. The election mailers will be out in full force - and there may be some difficulty for Republican candidates to persuade 350,000 workers affected that voting GOP will be to their benefit.

Yes, business will like it and it may help fundraising - but corporate "people" aren't voters....and votes is still the final arbiter.

This minimum wage law hasn't quite fulfilled the potential it could have. I am glad that it passed, but compromises here were unworthy of the effort.

Only time can tell us if we achieved full value for our workers.
comments (1) permalink

$9.50 Minimum - Indexed - Now!

Category: Labor
Posted: 03/25/14 19:48

by Dave Mindeman

I don't know why the minimum wage issue has become such a problem for Democrats. It has taken us so long to even bring up the issue that it seems mere foolishness to be arguing about side issues.

This only goes to show why indexing is so necessary. Low wage earners need to be protected. They need to keep up with the cost of living. They are the vulnerable ones.

So, I offer a possible compromise. Pass the $9.50 minimum and index it for the next 4 years. Four years and then it has to be reauthorized.

But word it so that the indexing ONLY goes away if the legislature takes it away. Indexing continues if the House and Senate cannot find the votes to repeal it.

Then we will know for certain. We will know if low wage earners can really have a voice in St. Paul. We will know if indexing really is going to hurt small business and will have the opportunity to change it if it has an obvious flaw.

But let's do something. Don't hold it up for office buildings, for cheap business stunts, for conservative rhetoric, or for the worries of rich corporations.

Do it for the hard working, paycheck to paycheck employees who need the dignity of a decent living wage.

Take it away if it becomes a problem. Take it away if you dare.

But first -- give it a chance.
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Minimum Wage: The Time For $9.50 (Or More?) Is Now

Category: Labor
Posted: 02/24/14 12:28

by Dave Mindeman

Let's dig a bit deeper into minimum wage.

The legislature is poised to make some changes here. It's coming late, but better late than never. Like I have stated before, I think that the $9.50 per hour figure is a minimum threshold, not a ceiling. A true living wage is considerably north of that figure. But the push back is going to be significant, so, for now, we will deal with that number.

The most "legitimate" argument for any kind of exemption comes from the restaurant industry. Somehow, whether by tradition or as a means of customer input, the restaurant industry manages to have the customers of their business also pay a significant portion of their employees salary. Now, in actual terms, tips are a direct reward system for the employee providing a service - as a contractor.....so it should not count as "wages" that the employer gets credit for. But in realistic terms, that is not the perception and waiters and waitresses have to count on tips as part of their salary structure.

Restaurant operations have counted on this system, budget that way, and expect it to continue. Therefore, an accommodation of some sort of exception is probably in order - and probably will happen.

Even with an exemption, there still needs to be a base increase here. The disparity between restaurant menu prices directly affects the tipping that the employees get. Small diner servers will never come close to getting the extra tip income that the finer restaurants can guarantee. It is difficult to differentiate all of this because tipping is not guaranteed income. Like I said, it is almost a contractor service and the employee, not the restaurant, has to earn the money directly from the consumer. The restaurant, by its pricing, only determines the potential of what the tip may be.

So, do we tier the minimum at restaurants with different price structures? That can complicate the law too much. I personally think that any exemption should stick to lower volume restaurants and that the higher priced venues should not be exempt at all. But it is doubtful that we can pass a law with that much detail.

So, a restaurant exemption will need to be addressed, but even then a wage increase of some kind is necessary for this "exemption".

In the Minnpost article linked above, I found this laughable....

With a straight face, Republican leaders and Chamber leaders say they support an increase to the $7.25, the current federal level. But, of course, that's not really supporting anything. Most minimum-wage workers in the state already are paid at that level and not the $6.15 official state rate.

In other words, that is an increase of nothing. Frankly, it is embarrassing that the Minnesota state wage is that far below the Federal standard. Minnesota should be better than that and hopefully, this legislature will finally fix this ridiculous disparity once and for all. For business and the GOP to even suggest that $7.25 be the allowed increase proves that they are not even serious about the negotiations. That argument simply takes them out of the debate - the Democrats, by default, will have to decide.

So, is $9.50 per hour the magic number? It looks like it is possible. Minimum wage workers should thank the unions of this state for making that a possibility. Without their media campaign regarding that number, it would not be the acceptable number it has become. And if minimum wage workers would think about it, unions could do this type of thing for all of you. Joining a union would make the minimum wage debate work more in the workers favor. It is worth considering.

But, legislatively, this is where we are at. The legislature will get hit with business pressure. The Republicans will go into their "let the market decide" hyperbole. (Which makes it quite clear that the "market" is quite happy with poverty wages for workers). But this increase is long overdue and if they can tie it COLAs, so much the better.

Minimum wage workers have no lobbyists. They don't have PACs. They live paycheck to paycheck hoping for a dime here or quarter there to keep them going.

Business gets there say on every issue. This time the workers get their due.

It's about time. $9.50 or bust.
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