Wage Fight Coming to Congress Finally

Newark   Local 100 members sent their petitions into their Congressional delegations in Arkansas, Texas, and Louisiana at the end of last week.  The Raise the Wages Act is finally coming to debate in the House of Representatives this week.

The bill would raise the federal minimum to $15 per hour over a period of years.  Increases thereafter would be indexed.  The tip credit would finally rise.  There are other bells and whistles, but this is the heart of it.

The Congressional Budget Office, a nonpartisan research arm of Congress, put out some numbers which were a mixed blessing for both opponents and advocates.  Potentially, this increase would take as many as twenty-seven million out of poverty over a series of years.  This would be a huge step forward in the fight for greater equity.  That’s the good news.  It also might speed the elimination of 1.2 to 3 million lower-waged jobs.  That’s a political powder keg requiring that politicians be careful lighting matches.

Not that they really care so much about that problem, and not that lower-skilled and lower paid jobs are not in jeopardy already, even at the current level of abysmal wages.  Amazon announced a $700 million retraining program for its staff from warehouse robot-helper to middle-level.  McDonalds is moving to robots and has already installed kiosks in many locations to replace counter help.  Walmart is long on the road to that place as well.  The list goes on and on.

We have 3.7% statistical unemployment, the lowest in 50 years, which in classic economics would seem to demand increases in wages.  We also have a mid-60% labor participation rate, the lowest since 1977, which is an important figure indicating the number of potential workers who have left the workforce and stopped looking, who might also be drawn back in if the money was worth their while.

The Chamber of Commerce understands it cannot prevent an increase forever and floated out its potential compromise which was just to the left of indentured servitude.  They were open to a double-digit minimum wage and realize that it has to increase sometime, but they wanted to keep sub-minimums, continue to try and freeze the tipped credit, and, heck no, to an automatic index.

The Senate is seen as the stumbling block since they can hide behind the CBO report, but people like New Orleans’ own Steve Scalise, Republican House whip, have also dug in their heels in opposition.  Luckily, we can still root for Speaker Nancy Pelosi to try and find a compromise here and thread the needle, even against opposition, left and right, to see if we might get a raise.  Our members need a raise, so we’re pushing, but this might just be the undercard to the real fight in 2022 with a new president replacing Trump who has made this a signature issue.

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Time to Make a Deal on the Federal Minimum Wage

New Orleans   The following is my guest blog on the Working Class Perspectives site run by Professor Sherry Linkon of Georgetown and Professor John Russo, formerly of Youngstown State University in Ohio and now visiting scholar with the Kalmanovitz Initiative for Labor and Working Poor, also at Georgetown University in Washington, D.C.

The federal minimum wage has been stuck at $7.25 per hour since 2009.  Until last year, when the unemployment rate dropped almost to the level of full employment, wages were stagnant, exacerbating inequality.  In 2018, average hourly earnings went up 3.15% and closed the year with a 3.9% jump.  Even with those recent adjustments, workers still need a federal minimum increase.

The Raise the Wage Act offers the prospect for change.  The bill was introduced in May 2017 by Rep. Bobby Scott (D-VA), the ranking Democrat on the House Committee on Education and the Workforce, but it died in committee in 2018 with 170 co-sponsors, Democrats all.  It proposed a dollar-a-year increase over seven years, eventually reaching $15.00 – more than twice the current minimum.  It would also phase out lower pay for tip-credit workers who are currently frozen at $2.13 per hour as well as disabled worker exceptions.

The Fight for $15 campaign, largely engineered and financed by the Service Employees International Union, has been a key force in defining $15.00 an hour as the goal.  Their work has helped set eight states on the path to establishing minimum wages of between $12 and $15 per hour in coming years, including Arizona, California, Colorado, Maine, Massachusetts, Minnesota, New York, and Washington.  Thirteen cities, including New York City, Seattle, and San Jose, are already at $15 or higher.  While Fight for $15 has created momentum for the new Democratic House majority, today’s leaders should not forget the lessons learned from decades of living wage fights.

On January 18, 1997, ACORN and Local 100, United Labor Unions (then affiliated with the SEIU), presented voters in Houston, Texas with what seemed a radical proposal at the time: a city ordinance to raise the minimum wage to the level of $6.50 per hour for all workers.  Only months before, the federal minimum had finally risen from $4.25 per hour to $4.75.  In a patronizing campaign against us, service industry and general business employers insisted that they understood our demand, but we were going about it the wrong way, and our proposal would cost jobs.  While we won in lower-income and working-class districts, we lost the election 2 votes to 1. In River Oaks, the district where former President George H. Bush lived and voted, we garnered just one vote.

Soon after, ACORN put a similar proposal before Denver voters, asking them to approve a minimum wage of $6.25.  An expensive, blunt force campaign in the final two weeks by the hotel and restaurant association and fast food operators swamped us. Again, we lost two to one loss even as we swept black and brown, lower income, and working precincts throughout the city.

We learned a key lesson from those losses: do the research. In Arizona, Michigan, Florida, and Ohio, we used polling to find out the rate that would gain support from at least 60% of voters. When we did that, even strident corporate campaigns didn’t block our way. Where we couldn’t do polling, we pegged the increase more modestly as a premium above the federal minimum, usually one dollar, which won in New Orleans, Missouri, and elsewhere. Once we learned to propose acceptable target rates, we won many more votes, and no living wage statewide proposition has lost at the ballot box in more than a dozen years. Between 1996 and 2008, we won more than 125 “living wage” campaigns around the country, delivering billions of dollars’ worth of raises to millions of workers. Where we won increases indexed to cost-of-living, like Florida, lower-waged workers continue to benefit.

State and local minimum wage and living wage campaigns have continued in full force and fury.  Approximately twenty states and twenty-three localities now have higher base hourly wage rates than the federal standard, and some 5.2 million workers began this year with a wage increase. Individual bumps in annual pay from $90 to $1300 add up to about $5.4 billion of increased income for workers. This is good news. But workers in twenty-nine states – about 2.2 million people — are still stuck at $7.25 per hour – or less!

It’s time to make a deal.

Reportedly, Democrats believe they now have enough votes to pass something like the Raise Wages Act and demand that the Senate either support, negotiate, or reject raising workers’ wages.  We need to force politicians to finally deliver, whatever the intra-party polarization and squabbles.

We also need to remember the lessons from the past.  In Houston, Denver, and initially New Orleans, we lost support when we proposed raising the minimum 37% over the existing federal standard.  To get to $15 on a fast track would be a jump of more than 100%, doubling the minimum wage.  Pew Research found only 52% support for that big an increase.

It’s just not likely to happen all at once.

Even raising the minimum $1 per year is steep and unprecedented. The last ten-year freeze of the federal minimum, between 1997 and 2007, the raise was seventy cents annually for three years l.  A dollar per year for seven years will be hard to win.

But low wage workers need a deal, and at this point, just about any raise would do. Fifty more cents an hour for a full-time, 2080 hours a year worker is over $1000.  Sure, a dollar would be even better, but any raise would be a godsend. This would be even better if we could finally win some form of automatic indexing for future increases and at least lift the cap on tipped workers’ wages.  Both of those adjustments would be worth paying some real money to achieve at the negotiating table.

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