DC Dilemma: Fair Votes and Fair Pay versus Tip Subsidies for Owners

New Orleans  New Orleans is a service worker, hospitality industry city, as are an increasing number of other areas in the United States.  Tips are always an issue when so much of the workers’ income depends on them, especially when employers pay the federal minimum wage for tipped workers of $2.13 per hour versus the federal minimum for other workers of $7.25 per hour, which has been frozen for what seems like most of this century.  In some states and cities, like San Francisco, Seattle, and, most recently, Flagstaff, Arizona, voters and public officials have taken steps to try to deal with this issue.

Washington, DC put this issue on the ballot as well.  The voters passed the measure overwhelmingly to stairstep up the level for tipped workers to the full minimum wage in the city which is on its way to $15/hour.  In a democracy most of us, for or against, would have thought that settled the matter, the voters have spoken.  In Washington though somehow the National Restaurant Association, always on record against the measure before and after the vote, has joined with some of the restaurants in the capitol city and convinced the DC city council to review the measure and potentially overturn the vote of the people.

How could this be possible?  All of us know Washington has become crazytown, but we thought that was just on the federal level.  We didn’t realize that the new autocracy had leeched down to the city level as well.

On Wade’s World, I talked to David Cooper, a Senior Economic Analyst for the well-regarded Economic Policy Institute (EPI) and the deputy director of EARN, the Economic Analysis Research Network, about a study he authored in the middle of this mess to remind the city council that in fact the evidence thus far is that workers do better financially in “one wage” cities than in tipped cities.  In DC, the numbers also matter because the data Cooper has marshaled also remind anyone interested that in a majority African-American city, blacks do worse by a more than 20% margin than white workers on tips, and black women do the worst of all, so they stand to benefit critically from a “one wage” program.

Cooper’s report reminds workers and the public of a key fact about the “tipped” wage that the restaurant folks like to sluff over as they pretend to be concerned about their workers income.  The level between the tipped minimum whether $2.13 federally or over $3.00 in DC is a direct subsidy from the worker’s tips provided by the customers for their excellent service which is then effectively passed over to the employer until the DC minimum or elsewhere the federal minimum is reached, and that’s nearly $10 an hour.  What is left after the worker de facto pays their employer for their space on the floor or behind the bar is all that is gratis.   So even ignoring the basic democratic facts that the voters have spoken, how could this ever be fair?

I’m reminded of an organizing committee meeting of a bunch of carriage drivers in the French Quarter that we organized years ago.  At one union meeting an argument broke out when the members started debating whether their work was  “a job or a hustle.”  That says it all.  These are jobs.  They need to be paid with the respect, dignity, and wages that the workers deserve.  The rest is lagniappe.

***

Please enjoy Rosanne Cash & Sam Phillips’ She Remembers Everything.

Guiding Light by Mumford & Sons 

Carl Broemel’s Starting from Scratch.

Thanks to KABF.

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Raising the Minimum Wage and Lowering the Maximum Wage

Parade through the streets upon the strikers’ victory, 1912, Lawrence, Mass. (Bread & Roses Strike)

Kawakawa, New Zealand   After decades of organizing to raise the minimum wage at the local, state, federal, and international level and winning more battles than losing, it is still frustrating to see the inequality gap increasing in country after country, as we continue to be ignored in Congress with a frozen national minimum wage and are outflanked by the rich and corporations larding one tax break after another.  All of which made me a prime suspect to be won over by an argument that we need to couple a rising minimum wage with an effort to lower the maximum wage.

Sam Pizzigati makes a heckuva of an argument for just that in The Case for a Maximum Wage. After marshalling an array of facts and figures reminding us how out of control wealth and inequality have become he takes on redistribution, not because he’s against it in principle, just that it isn’t enough to get the job done of achieving greater economic and social equality.  Partially, he states flatly that redistribution, including fair tax rates, will always be targeted politically, powerfully, and effectively by the rich. There was a time, a long time ago, mainly during the periods of war and recession, when tax rates ranged as high as 90% for the rich. In the boring and maligned 1950s, coming out of the war and recession, we were a more equal society, as was the case in other countries as well, because of the growing middle-class in the wake of more aggressive tax rates.

If redistribution isn’t enough to get the job done, something Pizzigati called pre-distribution might be worth a shot, but the real proposal he makes is that the maximum wage should be capped at no more than 100 times the federal minimum wage at roughly $1.5 million USD given the current frozen level of $7.25 per hour.  He does that while gritting his teeth, because he likes other proposals that cap the wage at ten times, but he’s trying to be reasonable.  The minimums won’t be raised more equally until the maximum’s have a fixed self-interest in assuring that is the case.

Not that there’s a chance in hell in the current political climate.  Pizzigati argues the path forward starts with corporations, given the current power of the rich.  He finds hope in various proposals in the UK and USA that force disclosure of pay ratios between top executives and hourly workers.  He wants to incentivize corporations by rewarding those on the equity team with preference for federal contracts and other state benefits, among other things.

Yes, that’s a stretch of the imagination, too, but Portland, Oregon has stepped up with an ordinance that will raise $3.5 million for the city by jacking the tax rate for corporations persisting in their commitment to enriching the executives compared to the workforce.  Initiatives in Switzerland, policy pronouncements by the Labour Party, and other cities in the USA debating following Portland’s lead are all grounds for optimism.

Inarguably, Pizzigati argues that over the last generation we have made progress on raising the minimum wages closer to living wages, but it’s a fight that is ongoing, so now is a good time to start the long march to achieving a maximum wage as well in order to achieve equality and make our society sustainable in the future.

Facebooktwittergoogle_plusredditpinterestlinkedinmail