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US House Undermines State Wage Laws for Tipped Workers



Thursday, August 03, 2006

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US House Undermines State Wage Laws for Tipped Workers

Last Friday, in an act of perverse cynicism, the US House ostensibly passed a $2 per hour increase in the federal minimum wage, but conditioned its passage on handing out hundreds of billions of dollars in budget-busting cuts in the estate tax and other special tax breaks for the rich.

But even the increase in the minimum wage is poisoned by an additional provision, Sec. 402, that would preempt state laws that provide for a higher minimum wage for tipped workers.  If enacted, this would be the first time in American history that the federal government has used its authority to undercut state wage laws.

Expanding The Tip Penalty: The federal minimum wage is explicit that states and local governments are free to create higher minimum wage rates than the federal level for any and all groups of workers.  While the federal minimum wage allows employers to pay a lower wage to tipped workers, seven states have eliminated this "tip penalty" on the assumption that consumers pay tips not to subsidize low-wage employers but to actually reward service.

But the new provision, which the National Restaurant Association admits was enacted as a special interest favor, would immediately cut wages for up to a million tipped workers in states that eliminate the "tip penalty," creating a wage cut of as much as $5.50 an hour for those tipped workers.  Those seven states can only restore those lost wages to tipped workers if they enact new legislation barring any increase for those tipped workers in future laws-- and all other states would be barred from eliminating the tip penalty in the future.  

Ignoring Federalism: This law is a dangerous precedent for rightwing politicians to try to preempt all state minimum wage rates higher than the federal level and parallels rightwing state lawmakers enacting laws banning local governments from enforcing local minimum wages higher than the federal wage level. Backed by the conservative American Legislative Exchange Council, these "minimum wage repeal acts" are the model for the national conservative leadership going further and preempting state minimum wage laws, just as they recently preempted state class action laws and just as they have preempted state health care and environmental regulation.

Activists around the country are calling on the US Senate to reject this cynical undermining of state minimum wage laws and start over with a new bill that improves the lives of working families without special interest giveaways.

To see how the rightwing American Legislative Exchange Council is handling this legislation, be sure to check out today's Eye on the Right in today's Dispatch.

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Increasing-Democracy


Instant Runoff Proposals Advance Coast-to-Coast

Voting reform advocates secured a series of victories in recent week as proposals to embrace "instant runoff" voting advanced in North Carolina and California -- with more proposals moving forward in Washington and Minnesota this fall.

Background on Instant Runoff Voting (IRV): One of the biggest problems in American elections is the so-called spoiler factor -- since a majority is not required to win, ideological allies can quickly become fierce foes in three-way elections where splitting the vote can have harsh consequences. The frequent historical solution to this situation is the so-called French or Louisiana model -- an open field and a runoff with the top two vote getters.

But runoffs have their own problems. Crowded primary fields can create weird outcomes. In 2002, the far rightwing Jean-Marie Le Pen unexpectedly outperformed the mainstream left-of-center candidate Lionel Jospin (Le Pen received 17% of the vote to Jospin's 16%), leaving French voters a choice between a right-of-center and far-right candidate in their general election. Additionally, runoff elections historically suffer from low turnout.

Instant Runoff Voting addresses these issues by compressing multiple rounds of runoff comparisons into a single election through the use of ranked ballots. Ballots for first-choice candidates are tabulated. Less popular candidates are eliminated and votes are transferred to next choices until, eventually, the winner has received support of a majority of the electorate. The system is already being successfully used in San Francisco and Burlington, VT, where it saves costs by eliminating runoff election expenses.

Instant Runoff Victories/Campaigns:

  • North Carolina: Motivated by the successful use of instant runoff voting elsewhere and frustrated by a $3.5 million runoff election that saw 3% turnout, North Carolina's legislature passed bipartisan legislation to use instant runoff voting in a pilot project in ten counties and ten cities and in future judicial vacancy elections. The pilot program gives voters a chance to adapt to the new system while saving money in these local jurisdictions.
  • Oakland, CA: Having watched nearby San Francisco experience success with instant runoff elections, Oakland's city council voted to give their residents an option this November. Citizens there will vote on whether to use IRV in future elections. Interested individuals can find out more about the local campaign at OaklandIRV.org.
  • Minneapolis, MN: City officials placed an IRV measure on the ballot in a state famous for the strength of its third parties. The measure will be voted on in November. Interested individuals can find out more about the local campaign at BetterBallotCampaign.org.
  • Pierce County, WA: Pierce County, WA, home of Tacoma and over 750,000 people, is considering charter changes this November, including a measure to institute IRV. The local website is not yet launched, but FairVote is providing updates.

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Rewarding-Work


Illinois Judge Upholds Hotel Workers Rest Breaks Law

Last year, the Illinois legislature enacted Public Act 094-0593, a law that requires hotels to provide hotel attendants in the Chicago area with two 15-minute breaks and a half-hour paid lunch period, a response to increased workloads imposed in recent years on workers who make up hotel beds, workloads which have led to increased injury among hotel workers.

After its passage, the Illinois Hotel & Lodging Association filed suit challenging the law, hauling out the usual corporate argument that legislation regulating individual industries or particular regional areas are somehow illegal.  Last week, the lawsuit was defeated and the law will be going into effect.

Illinois judge Judge James R. Henry rejected the industry argument and upheld the law, arguing, ""The Amendment targets an evil, i.e., the intense workload of hotel room attendants, in an area with the largest concentration of those workers...The amendment is simply another law to protect a sector of hotel workers who need such protections due to the strenuous nature of their work and the competitive industry they work in."

While workers in other regions or other industries would benefit from similar protections -- and the Illinois law is a good model for extending paid rest periods beyond current state laws -- the judge made clear that incremental laws that extend innovative laws to particular industries or regions are valid and reasonable approaches to public policy.

The decision also reinforces legal analysis that the Chicago ordinance raising wages for large retail workers will also be upheld in court if enacted.

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Research-Roundup


State Policy Briefings, Estate Taxes v. Minimum Wage Hikes, Welfare Rules, and Election Access and Integrity

The Center for American Progress has prepared 20 public policy briefs for current elected officials and candidates  at national, state and local levels of government and for any interested advocacy groups around the nation, including key facts, the current state of play, public opinion and the progressive plan of action.

Highlighting the cynicism of linking estate tax cuts to a minimum wage increase, the Center for Budget and Policy Priorities contrasts the 6.6 million workers in states across the country who would benefit from a minimum wage increase versus the 30,000 multi-millionaires who would get estate tax benefits.

In Getting On, Staying On, and Getting Off Welfare: The Complexity of State-by-State Policy Choices, the Urban Institute reviews the varied rules in different states for those receiving Temporary Assistance for Needy Families (TANF)-- and how they may need to change in light of new federal rules.

The Century Foundation has published Balancing Access and Integrity outlines reforms that can improve implementation of the Help America Vote Act (HAVA), including ways to improve voter registration, manage provisional ballots and registration databases, test voting machines, and promote early voting.

US House Undermines State Wage Laws for Tipped Workers

ACORN: Action Center to Contact Senators to Vote No on Law
Economic Policy Institute, Analysis and Text of House Provision Preempting State Minimum Wage Laws for Tipped Workers
Brennan Center for Justice, Analysis of HR 5970
Sec. 402. Tipped Wage Provision in House Bill

Instant Runoff Proposals Advance Coast-to-Coast

FairVote, IRV America; IRV in Your State
Oakland, CA, Text of IRV MEasure
North Carolina, Text of Bill
DemoChoice -- Online polls formatted in the IRV style

Illinois Judge Upholds Hotel Workers Rest Breaks Law

Illinois Public Act 094-0593
US Dept. of Labor: Minimum Paid Rest Period Requirements Under State Laws
New York Times, Hotel Rooms Get Plusher, Adding to Maids' Injuries

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Eye on the Right

The rightwing, corporate-financed American Legislative Exchange Council is trying to mobilize its legislative members on behalf of the federal bill to cut the estate tax and gut state minimum wage laws, despite the negative consequences for workers and state authority. ALEC recently invited rightwing legislators on to a conference call with White House staff encouraging these legislators to contact their Senators to urge them to vote for the measure (Progressive States managed to join the call). Amazingly, the biggest point of contention on the call was that several rightwing legislators were upset that -- having gone to bat to defeat minimum wage bills in their state -- the White House was now endorsing a minimum wage hike at all. No concerns were raised at all that the corporate conservative in Washington, D.C., were usurping state authority.

Upcoming Events

Friday, Aug. 4 -- Washington, DC, The Center for American Progress hosts Can States Override the Stem Cell Veto: Advancing Stem Cell Research in the Face of Federal Inaction from 10:00 AM to 12:00 PM. The event is at CAP's offices in Washington and features U.S. Senator Tom Harkin of Iowa and Governor Jim Doyle of Wisconsin. RSVP

Monday, Aug. 14 -- Nashville, TN, Progressive States is partnering with the AFL-CIO and American Federation of Teachers to host the annual meeting and reception of the National Labor Caucus of State Legislators in Nashville, TN. Details

Jobs & Internships

Progressive States' policy department is hiring for new policy positions and is also looking for interns. For details, visit the Jobs & Internships Page.

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Please shoot me an email at msinger@progressivestates.org if you have feedback, tips, suggestions, criticisms, or nominations for any of our sidebar features.

Matt Singer
Editor, Stateside Dispatch

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