Minimum wage gets a boost in state initiatives

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Did you know that Arkansas will soon have the highest minimum wage in the United States at $9.25 an hour come January 2019? A quarter of the state’s workers will get a raise! Missouri isn’t far behind, with an initiative passing this fall as well.

As Congress and state legislatures remain in gridlock and unable to move progressive legislation, another very hopeful phenomenon is playing out through the initiative process, even in deep red states. Ballot initiatives are allowing citizens to directly support legislative reforms. As the Arkansas example shows, the greatest beneficiaries are those making minimum wages.

The federal minimum wage is stuck at a paltry $7.25;  for seven years, Congress has taken no action to change that. But 29 states, from Maine to Hawaii, and more than a dozen cities have increased their minimum wages. This translates into 60 percent of minimum wage workers making higher than the federal floor, adding $5 billion to the paychecks of 4.5 million low-wage workers.

Ten states are boosting their wage floors step by step, including California, Colorado, Hawaii, Maine, Michigan, New York, Rhode Island, and Washington. Automatic cost-of-living increases will kick in in eight other states: Alaska, Florida, Minnesota, Missouri, Montana, New Jersey, Ohio, and South Dakota.

But let’s give credit where credit is due. The “Fight for $15” movement launched a campaign in liberal areas, first winning at Seattle Tacoma Airport in November 2013 with a referendum for $15 an hour. Within two years, New York and California had adopted $15 an hour as their target. The only thing that is slowing this campaign is state legislatures. When Albuquerque, Chicago, Los Angeles, Providence, Kansas City, San Francisco, San Diego, and Santa Fe each adopted their own minimum wage laws, 18 state legislatures passed laws preempting cities from increasing minimum wages.

Even the liberal DC City Council overruled Initiative 77, which would have done away with tipped wages and ensured all workers in the District earn the minimum wage.

The takeaway here is that increasing the minimum wage turns out to be very popular when placed on the ballot by initiative, even in red states like Arkansas. But reactionary state legislatures, bowing to pressure from the business community, too often work to undo these laws.

We are also cheered by Amazon’s announcement that it will pay all its workforce a base $15 minimum wage and JPMorganChase will pay $18 as a base wage.

Things are looking up for hourly workers. Florence Kelley, NCL’s General Secretary for our first 33 years and drafter of the first minimum wage laws in the United States, is surely smiling down upon us!

NCL’s experiences with Initiative 77, DC’s repealed One Fair Wage attempt

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Earlier this month, DC City council voted to repeal Initiative 77 in an 8-5 vote. The initiative, which was supported by DC residents by a 55-44% vote, would have eliminated the gap between the “tipped credit” and minimum wage for restaurant workers and ensure that all tipped workers get the minimum wage that other workers are entitled to.

As it stands, tipped workers in Washington DC get a base tipped wage of $3.89 per hour plus tips. If workers don’t get the minimum wage—which is currently $13.25 an hour in DC—employers are supposed to make up the difference. Initiative 77 was intended to shift the burden of ensuring wage equality from consumers to employers, where we believe it actually belongs.

National Consumers League took a personal interest in this issue because of our extensive history with raising the minimum wage over the decades. We testified before the DC City Council in support of Initiative 77 in what was a marathon hearing that started at 11 am and ended at 3 am. In our testimonies, we emphasized the extensive history of the minimum wage laws unfairly carving out tipped workers, while stressing the importance of ensuring that DC’s most vulnerable make an equitable wage. Our testimonies also included the personal experiences of a staff member that has worked in various front-of-house and back-of-house restaurant positions at businesses in Oregon, a one fair wage state, and Georgia, a non-one fair wage state.

Supporters of the Initiative were, by and large, people of color or professionals with extensive experience in labor law or wage policy. The most vocal opponents of the bill were restaurant employees or small restaurant owners in DC’s most affluent neighborhoods. Opponents followed what seemed to be scripted testimony, arguing that Initiative 77 was a bad bill because it came from “outside of DC” or that implementing it would be the first step of a “grand plan” to eliminate tipping.

In our view, the public hearing showed a clear bias for those opposed to Initiative 77. DC Council Chairman Phil Mendelson—an avowed opponent—led the hearing. Witnesses in favor of repeal were stacked onto the beginning of the hearing, while key supporters of Initiative 77 spoke much later—well after many of the councilmembers had left. Sadly, the council showed a lack of understanding about Initiative 77 and its potential impact on DC as a whole.

Opponents on the Council also expressed opposition to any type of compromise to Initiative 77. At no point during the hearing, did Chairman Mendelson or Councilmember Jack Evans—also an avowed opponent—suggest that they were open to a compromise or that they were willing to meet with groups to address concerns about the plight of tipped workers in DC. Mendelson went so far as to attack one witness from the Restaurant Opportunities Center’s DC office (ROC-DC) when he called the woman back on the stand and suggested she was a plant used by ROC to gather support for the bill. Despite this, ROC-DC and other advocates appeared more than reasonable, suggesting potential compromises; offering an extended timeline for wage increases, tax cuts, and others. Many of the council members that voted for the repeal—most notably Councilmembers Jack Evans (Ward 2), Phil Mendelson (Chairman), Kenyan McDuffie (Ward 5), and Anita Bonds (At-Large)—kept saying that 77 used deceptive language to sway voters. “The language in [Initiative 77] was misleading at best, dishonest at worst,” said Mendelson shortly before the October vote. Why? He didn’t say.

Yet the campaign slogan for those opposed to 77 was “Save Our Tips” despite there being no restriction of the tipping practice in the Initiative 77 bill. We believe that voters were not duped and that the bill passed in every ward, besides Ward 3, because DC’s residents wanted to better the lives of tipped workers. As Councilmember Robert White Jr. said in the public hearing, “[we] cannot assume that voters were ignorant after a campaign of fierce campaigning on both sides.”

Nevertheless, the DC Council voted in favor of repealing the bill. In spite of the sensible wage protection policy offered, the repeal of a measure that reflected the will of the people in the District Of Columbia, which is exactly what 77 was. Initiative 77 is another example of hardworking employees losing to big money—the National Restaurant Association spent millions to defeat 77 and when they lost that battle, persuaded the DC Council to overturn it—and ultimately being ignored. Voters showed up and overwhelmingly voted in favor of Initiative 77, yet the council responded by telling voters that their vote doesn’t matter and their voice is not important. What a sad day for democracy in our nation’s capital.

Thank you to the  DC City Council members that respected the votes of DC residents and supported the remedying of wage inequality by voting for Initiative 77.

Charles Allen (Ward 6)

Mary M. Cheh (Ward 3)

Brianne K. Nadeau (Ward 1)

Elissa Silverman (At-Large)

Robert White, Jr. (At-Large)

National Consumers League disappointed by DC City Council’s overturning of popular vote

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October 4, 2018

Media contact: National Consumers League – Carol McKay, carolm@nclnet.org, (412) 945-3242 or Taun Sterling, tauns@nclnet.org, (202) 207-2832

Washington, DC–The National Consumers League (NCL) is deeply disappointed by the DC City Council’s vote to overturn a ballot measure voters approved in June to raise the minimum wage for restaurant servers and other tipped workers in the District of Columbia.

On Tuesday, the city council voted 8 to 5 in favor of repealing the measure, and now it’s up to Mayor Muriel Bowser to either veto or sign the bill. In the past, Bowser has expressed opposition to Initiative 77. The initiative requires DC businesses to eventually pay the full $15 local minimum wage to restaurant servers, bartenders, valets, and other workers who earn most of their income from customers’ tips.

“Abolishing a low minimum wage for tipped workers would give a much-needed boost to low-income families who barely earn enough to make ends meet,” said NCL Executive Director Sally Greenberg. The national consumer and worker advocacy organization is headquartered in Washington, DC, where some of its staff has been involved in advocacy efforts to ensure that DC residents’ voices were heard on the issue.

Businesses in the city can currently pay tipped workers as little as $3.89 per hour as long as workers make enough money in tips to earn the full minimum wage. (The city’s regular minimum wage is currently $13.25 but will reach $15 by 2020.) If their tips aren’t enough, employers are supposed to pay the difference.

Despite being approved by voters in the June primary, the measure sparked fierce opposition from the local restaurant industry, which claimed that such a move would drive away small businesses and force restaurants to slash jobs.

Despite all the hype surrounding the potential negative impacts of Initiative 77, it’s unlikely to have drastic consequences. Based on available research, customers would likely pay a little more for their meals and tip slightly less. However, workers would see a modest income boost, which would help DC’s most vulnerable communities become less financially fragile.

“The fate of Initiative 77 represents a crucial test for the national movement to raise wages for low-wage workers,” said Greenberg. “Prospects may be bleak for this voter-approved ballot initiative, but our fight for equitable wages will continue.”

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About the National Consumers League

The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.

NCL: Protect children in tobacco fields – National Consumers League

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childtobacco.jpgAs a nation, we have turned our backs on some of America’s most vulnerable workers. Right here, in Kentucky and other tobacco-producing states, children as young as 7 years old are facing Third World conditions. Toiling in the hot sun, these child workers must don black plastic trash bags with holes poked for their head and arms to avoid contact with tobacco leaves. Without it, their skin absorbs nicotine — a lot of nicotine. On a humid day, when tobacco leaves are dripping with dew, a tobacco worker may be exposed to levels of nicotine equivalent to smoking three dozen cigarettes. Nearly a two-pack-a-day habit.

America boasts progressive labor laws, yet hundreds of children working in our fields are subject to unhealthy, unsafe levels of nicotine exposure. These young workers often suffer from “green tobacco sickness,” which leads to dizziness, nausea, vomiting and other health complications. We should be ashamed that the laws protecting American child laborers on U.S. tobacco farms are weaker than the laws in many developing nations. In India and Brazil, for example, people younger than 18 are not legally allowed to work in tobacco fields. In America, children can work in tobacco fields at 16, and — in certain situations — children can legally begin working in other types of agriculture at 12 years of age.

As the most powerful country in the world, what kind of example are we setting?

It is time for our collective conscience to be stirred.

No longer can we turn our backs to the reality of girls in Kentucky working long hours in the fields through bouts of nausea and dizziness, making less than minimum wage. No longer should we ignore the image of a young man in North Carolina, thirsty, tired, and ill after working a 12-hour shift in the fields. Many of these young laborers come largely from Latino immigrant families, working with virtually no protections and in constant fear of losing their jobs. These horrid working conditions for children have no place in America.

Americans are rejecting cigarettes in record numbers: Today 18 percent of us smoke, compared with 45 percent in the 1950s. American retailers are discontinuing sales: CVS has sacrificed $2 billion a year in profit by removing tobacco products from its shelves. We are finally making progress in reducing tobacco use, yet we cannot muster the resolve to prevent children from being exposed to nicotine via dangerous, difficult farmwork.

For decades, health and child labor advocates have called for reforms to our agriculture laws to better protect the children working in our fields. In 2012, these advocates — and American child farmworkers — suffered a devastating defeat when the Obama Administration buckled to the powerful agriculture lobby and legislators from tobacco-producing states, withdrawing rules that would have increased protections for child farmworkers and specifically banned tobacco work for children under 16.

Efforts to right this wrong are building momentum.

In May, Human Rights Watch released a jarring report documenting the working conditions of 141 children, ages 7 to 17, who work in U.S. tobacco fields. This led to a rapid response by the advocacy community who, on Aug. 28, sent a letter to the president urging him to take immediate action to protect child tobacco workers. The letter, written by the Child Labor Coalition, a group of more than 30 advocacy organizations that is co-chaired by the National Consumers League, was signed by more than 50 groups.

On Sept. 6, the New York Times profiled child laborers in tobacco fields, exposing the unthinkable conditions under which these children work. And more recently, the Council for Burley Tobacco, an industry group that represents 5,000 tobacco growers, stated publicly: “We do not condone the hiring of anyone under the age of 16 for work in tobacco anywhere in the world.”

In the halls of Congress, there too now exists a glimmer of hope for new legislation that would better protect children in tobacco fields. In July, Rep. David Cicilline, D-R.I., introduced legislation that would amend the Fair Labor Standards Act to eliminate child labor on tobacco farms. More recently, Rep. Matt Cartwright, D-Pa., has called for regulatory reform that would strengthen laws that protect these child workers. In the Senate, 16 members, led by Sen. Tom Harkin, D-Iowa, wrote a letter to the largest tobacco corporations asking them to ban work by minors.

We are now at a critical juncture. The tobacco harvest is at its peak, and the children picking this crop face green tobacco sickness every day they work in the fields.

So often we are disapproving of labor abuses on the other side of the world. We must hold ourselves to that same standard, and no longer turn a blind eye to this national disgrace that is happening in our own backyards. We must enact regulations to protect the nation’s most vulnerable — our children — from this dangerous work.

This Sally Greenberg op-ed was originally published in the Courier-Journal on Thursday, October 2, 2014.

Cash-register-tape ads: one more thing for consumers to worry about – National Consumers League

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Jane_Daugherty_mug_shot.jpgThis blog was submitted by guest blogger Jane Daugherty who is a doctoral candidate and instructor in the School of Communication at the University of Miami.

Those ubiquitous color ads printed on the backs of grocery store checkout receipts appear to be a boon to everyone: shoppers get special discounts at local businesses including mechanics, roofers and dry cleaners, the supermarkets get cash register tapes for free and the companies selling the ads make a tidy profit.

I’ve used them numerous times to save money on dry cleaning, oil changes for my Honda CRV and free tire rotations. The last coupons I got at my local Winn-Dixie supermarket in West Palm Beach even included an ad for the people who print the cash register ads and an invitation to visit them on Facebook and “download coupons on the go.”

And cash–register tape ads create jobs. Tens of thousands of people around the country get hired to sell the ads or work at call centers to contact potential advertisers while thousands of sales reps go to local businesses to sell the ads, I discovered with a little research. To my surprise, I also found that some of the sales managers for register-tape ads make six-figure salaries plus six-figure commissions, a lot more than I’ll ever make as a university professor. Executives and owners of register-tape advertising firms can make millions.

This piqued my ex-investigative reporter‘s curiosity. It turns out that hundreds, perhaps thousands of U.S. workers are employed by one of the largest cash-register tape advertising companies, Register Tapes United Inc. (RTUI) based in Houston, TX.

Many of RTUI’s workers get nothing or a fraction of what their would earn hourly for their fulltime and overtime work selling ads, according to two large class-action lawsuits filed against RTUI in Maryland and California. The lawsuits charged RTUI with illegal labor practices that deprive their sales representatives and call center employees of minimum wage pay, workers’ compensation, medical benefits, expenses, while RTUI promised hefty sales commissions and flexible working conditions. And although most of those who sued worked fulltime or more on a regular schedule, they also submitted evidence that they were also deprived of overtime.

But what about the discounts I’ve become accustomed to using those cash register ads in the past? A little more checking with the grocery stores where I shop showed that RTUI provides most of the free advertising-laden cash register tapes to supermarkets in Palm Beach County, where I live. In fact, the lawsuits charging them with cheating their workers by classifying them as contract employees say RTUI is likely the largest firm in the country producing advertising-backed cash register tapes for grocery stores.

So once again, as a consumer I face the dreaded decision I think of as my Walmart morality test. Sure, I can buy numerous products I need for my home, my car, my dog, even groceries and discounted gas at Walmart, often cheaper than I can buy them anywhere else.

But three years ago, after reading a case study on Walmart’s employment practices for a graduate school class showing the company skirts labor laws by employing mostly part-time employees with no benefits, I did what I knew I should do as a former union member, a worker in an underpaid profession (teaching) and someone who actually hears sad tales about Walmart working conditions from a young friend who currently works at a South Florida Walmart because he couldn’t find another job. I actually quoted Nancy Reagan to the Walton family in my mind so I could “Just say no.” And I don’t shop at Walmart anymore.

Also somewhat of a geek – it is not an accident that I am finishing my Ph.D. in Communication at the University of Miami in my early 60s — I wanted to know more about the cash-register-tape ads. I poked around a little more to see if I needed to employ my “just say no” approach to those big-discount ads from RTUI.  As a journalist for almost 25 years before I became a university professor in 2005, I know my way around legal databases.

One of the recent class action lawsuits I found against RTUI was filed in Maryland District Court by Taj Grayson, who claimed RTUI routinely classified him and other hourly workers as independent contractors, although they worked regular, fulltime, employer-set schedules in RTUI call centers. The lawsuit said the workers were closely supervised and did not have the freedom to set their own hours or the special skills required to be independent contractors under U.S. labor laws.

RTUI has been the defendant in multiple lawsuits alleging that the company also fails to pay its sale representatives promised commissions, car expenses and overtime also by calling them  “contract employees.”

One of the plaintiffs in the Grayson case, Sally Henson, then 53, worked for RTUI in Southfield, MI, just north of Detroit where I lived for nine years, so using the court file to find her, I called her up.

Now a sales representative for ADT, Henson said she “had extensive sales experience when she went to work for RTUI, which, she said promised her a sales job with commissions,  “I was promised an outside sales job. They seemed eager to get me because of my experience.”

But first Henson said she was told she had to work  “a couple of days in the call center to see how it works.” The call centers booked appointments with local business owners, then RTUI sales representatives would keep the appointments and to sign the business to multi-year contracts for their ads to appear on the cash register tapes of local supermarkets, she said.

“I worked 8 to 5 or 5:30,” Henson said, “Five days a week. You had to be in the office making calls reading the scripts the whole time. There was no lunch hour and workers were not allowed to leave, she said.

“I was an idiot. I worked there two or three months in the call center before I realized they were never going to keep their often repeated promises to let me be a outside sales rep where you earn commissions,” said Henson, who now works for ADT in Michigan doing outside sales. “Some weeks I literally got paid nothing. I think the most I ever made was $200 for a week.”

Without admitting any wrong-doing, RTUI settled the Grayson lawsuit last year. The 40 plaintiffs received $50,000 and their court costs and lawyers fees totaling $73,906 were also paid by RTUI under the agreement.

How widespread is the is misclassification of  workers charged in the class action lawsuits filed against RTUI, I wondered. At the National Employment Law Center, I contacted Catherine Ruckelshaus, general counsel and program director, to ask her about the labor practices Henson described.

A veteran labor lawyer, Ruckelshaus said, “Call centers have been a real hotbed of wage and hour abuses. The practice has become increasingly common, although it has been a problem for decades. The increase in (misclassifying) independent contractors has been driven by the downturn in the economy, which helps employers perpetrate these schemes.

“Greed is also a factor because often they can get away with it… There has been very little enforcement (of labor laws including the Fair Labor Standards Act).”

Ruckelshaus said unemployed workers who get contract employee jobs, then discover they are being exploited, are often reluctant to complain, which is often the only way the employers get caught. At the same time, she said, the federal and state governments lose billions of dollars every year that companies who misclassify hourly workers as contract employees fail to pay for Social Security withholding, payroll taxes, unemployment coverage and workers’ compensation taxes.

But the practice of illegally classifying hourly workers as independent contractors is so widespread today in construction, home care, sales, housekeeping and light manufacturing, that employers who violate labor laws gain an unfair advantage over businesses who use temporary employment agencies, Ruckelshaus said.

“Workers don’t feel they have any power today,” she said,  “And federal and state agencies who regulate labor practices are now under-funded and under-staffed.”

But many RTUI call-center workers did complain, including Henson and Grayson, who on April 5, 2011 filed their class action lawsuit. The lead plaintiff, Taj Grayson, worked for RTUI’s Columbia, Maryland’s call center fulltime, usually 46 hours a week, from August 2010 until January 2011, the suit alleges. Paid as an independent contractor, he received at total of  $2,560 from RTUI for five months’ fulltime work with no benefits, no federal or state taxes paid, and no choice of what hours he worked. In fact, Grayson was paid less than one third of what he would have been paid at the hourly minimum wage, the lawsuit said. What he received amounts to $98.46 a week take-home pay for a 46-hour workweek.

I did the math. If RTUI had paid Grayson as the hourly employee on a regular schedule, with supervision and no special skills required to read the company’s highly scripted pitches to local business to advertise with them, he would have been paid $8,671, plus benefits, plus Social Security credits, plus better working conditions, including regular breaks.

In Michigan, Henson said she took the 45-48-hour-a-week job with RTUI during the recession and if she had tried to live on her tiny paychecks, “I would have starved, if I didn’t have a husband who was working.”

But many RTUI workers, according to the lawsuits filed in Maryland and California, were hardly their own bosses. The class-action suits allege both sales and call-center workers were closely monitored by supervisors and required to literally read scripts to potential advertisers, trying to sign them multi-year contracts. Neither were they “growing their own businesses” or benefitting from sales commissions, which the legal definition of  “independent contractor” classification requires.

More research revealed that misclassification hourly workers as independent contractors has become so widespread nationally that the federal government has allocated $25 million for a joint IRS-Department of Labor initiative to attempt to make it harder, if not illegal, to class workers without the independent schedules and a share of profits as independent contractors. Texas, where RTUI is base, is one of the 16 states so far to join in the federal effort to prosecute businesses that misclassify hourly workers as independent contractors to illegally avoid paying federal and state taxes.

I also found that RTUI has run afoul of tax laws before.  Since 1995, nearly a million dollars in state and federal tax liens have been filed against RUTI including state liens in California Texas, Ohio, Mississippi, New York, Washington, Maryland, Wisconsin and Kentucky.

Ruckelshaus, who has represented numerous under-paid or unfairly treated employees, said companies who misclassify hourly workers as contract employees don’t just pay workers less than minimum wage and deprive them of benefit, they “cost the states billions in workers’ compensation non-payments… and cost the federal government billions in payroll taxes.”

Today an estimated 10.3 million people in the U.S. are employed as independent contractors, according to the U.S. Department of Labor. “Many, many of them are improperly classified to avoid taxes and to pay much lower compensation,” Ruckelshaus said.

Improper classification as contract employees is also claimed in the California in a still pending class action lawsuit against RTUI filed in 2011 in Los Angeles County. The lead plaintiff in the case is Allen Hamburger, employed as a RTUI sales representative since 2004 and fired without warning in 2009, when he was 66, for allegedly failing to meet his sales quota.

Joined by 50 other former RTUI employees, Hamburger’s lawsuit alleges that he and the others were improperly classified as contract employees, forced to work mandatory and unpaid overtime, denied payment for business expenses including mileage and tolls, not paid promised sales commissions, not provided with itemized wage statement in violation of California’s Labor Code and not paid for their final weeks of work.

A tentative settlement, in which RTUI makes no admission of “liability, culpability, negligence or wrong-doing,” would set up a settlement fund of $75,000 for the case, pay Hamburger an additional $2,000 for his work as the lead plaintiff, pay plaintiffs’ lawyers $30,000 and court costs of up to $6,368.18. The agreement awaits approval by a district court judge later this year.

Hamburger’s several attorneys did not return calls and emailed requests for comment. RTUI’s attorney in the case, David J. Hamilton, said when I talked to him on June 18 that the district judge has not yet signed the negotiated settlement , but RTUI did not break labor laws, “We take the position that they all independent contractors.”

Jane Daugherty, a doctoral candidate and instructor in the School of Communication at the University of Miami, is also a journalist who was a Pulitizer Prize Finalist at the Detroit Free Press. She is a four-time winner of the national Robert F. Kennedy Journalism Award for Coverage of the Disadvantaged and was a Nieman Fellow at Harvard University. From 2005-2010, she was Associate Professor of Journalism at Florida International University after working as an investigative reporter and editor at the Palm Beach Post, the Miami Herald, the St. Petersburg Times and the Austin (TX) American-Statesman.