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Tough Wage Enforcement Law Approved in Iowa Senate

Tough Wage Enforcement Law Approved in Iowa Senate

Thursday, April 17th, 2008

http://www.progressivestates.org/dispatch

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Conference Call

Conference Call: The Perils of Voter Purging and Options for Voter Registration Enhancement

Progressive States Network will host a conference call tomorrow, Friday, April 18th, at 1:00 pm (EST) on The Perils of Voter Purging and Options for Voter Registration Enhancement. The call will discuss in more detail the policies and issues discussed in today's Stateside Dispatch.

Please RSVP at: http://snipr.com/voterpurging

Speakers will include:
Don Wright, Counsel for the North Carolina Board of Elections
Beth Fraser, Director of Governmental Affairs, Office of the Minnesota Secretary of State
Myrna Perez, Counsel in the Democracy Program at the Brennan Center of Justice at NYU
Christian Smith-Socaris, Election Reform Policy Specialist, Progressive States Network

Rewarding-Work

Tough Wage Enforcement Law Approved in Iowa Senate; Anti-Immigrant Measures Rejected

The Iowa Senate on Tuesday approved SF 2416, a bill to sharply increase fines on employers violating Iowa state wage laws, crack down on the practice of misclassifying employees as "independent contractors" to evade those laws, and protect workers reporting violations from retaliation.  

As Iowa Assistant Majority Leader Joe Bolkcom, the main sponsor of the Iowa bill, wrote in an editorial published in the Des Moines Register, such an approach is the real solution to the problem of the underground economy, not punitive attacks on undocumented workers:

As families in Iowa struggle to make ends meet, they are justified in feeling threatened when they see what were once good jobs turned into low-wage, sweatshop labor...  If Iowa were to ensure that all employers paid a decent wage, the attraction of hiring undocumented immigrants would diminish tremendously.  Any hiring of undocumented immigrants would then be due to legitimate shortages in the labor supply, not to employers using those workers to illegally undermine wage standards for the rest of the work force.

The Iowa Senate approach contrasts sharply with the punitive approach against immigrants embodied in a competing proposal approved by the Iowa House this week which would create new state ID requirements for new hires and "employee theft" provisions that would criminalize many immigrant workers.

Unreported Trend of Rising Wage Enforcement in States: In passing the bill, the Iowa Senate followed the increasing trend of states rejecting such punitive measures against immigrants in favor of working to enforce higher wage standards for all workers, citizen and immigrant alike.  Despite the media focus on a handful of states passing anti-immigrant measures, the unreported story has been the increasing crackdown by state governments on wage law violators as a response to the growing underground economy.  A few examples include:

  • The Arizona and Ohio minimum wage ballot initiatives passed by voters in 2006 included new triple damages against employers violating their state wage laws.  Just this week, Massachusetts made it the law that triple damages will be mandatory for violations of that state's wage law.

  • In 2007, Minnesota and Colorado both enacted new laws cracking down on misclassification of employees as "independent contractors" to evade state wage laws.
  • In New York, a new state joint task force of state labor, tax and worker compensation agencies conducted a dramatic sweep this year of 117 employers, finding 646 workers were owed minimum wage and overtime pay totaling $3 million.  Massachusetts created a similar task force earlier this month.
  • Illinois, along with a number of other states, has mandated a state study commission to collect data and information on lost tax revenues due to independent contractor abuses.

In 2008, California, Connecticut, Illinois, Indiana, Kentucky, Louisiana, Maryland, Minnesota, New HampshireNew York, Pennsylvania, Rhode Island, Vermont, and Wisconsin all introduced new laws to crack down on wage law violators and on employers misclassifying employees as independent contractors to evade those laws.

Anti-Immigrant Bills Stall; Wage Enforcement Seen as Better Solution:  A number of states that initially debated purely anti-immigrant measures recognized that failure to enforce state wage laws is the crux of the economic problem outraging state voters:

  • In Connecticut in 2007, a bill was introduced that would have made it a criminal offense to hire undocumented workers, but instead it was modified into a state law to go after all employers who commit workers' compensation premium fraud to cheat workers out of benefits.
  • The  Kansas House this year voted to gut an anti-immigrant bill and added provisions to severely punish employers exploiting undocumented immigrants by violating state wage laws and cracked down on misclassification of independent contractors.

One reason for this trend towards wage enforcement is that state governments lose billions of dollars in revenue each year due to the failure to enforce state wage laws.  Instead of wasting state money on costly, wasteful local enforcement of immigration laws, stepped up wage law enforcement will more than pay for itself.

More Resources

Growing-Economy

States Blowing Past Feds in Fighting Foreclosure Crisis

Faced with total and continued inaction on the federal level, Maryland enacted a series of emergency measures earlier this month to combat the foreclosure crisis in the state.  

  • HB 365/SB 216 reforms the foreclosure process and prohibits a foreclosure action to be filed for the latter of either 90 days after default or 45 days after a notice letter is sent. 
  • HB 360/ SB217 creates a comprehensive mortgage fraud statute that allows the seizure of property used in connection with fraud and provides defenses against forfeit for innocent owners, tenant and property used as a principle residence.  
  • HB 361/SB 217 establishes a requirement for a foreclosure consultant, bans foreclosure rescue transactions and provides consumer protections for sales of residences 60 days in default.

A recent Pew Charitable Trust study highlights the many ways that states have stepped in to fill the void left by massive federal inaction towards the foreclosure crisis.  The study found that 20 states have launched foreclosure intervention or prevention initiatives.  Sixteen states have enacted both high-cost lending and foreclosure intervention laws.  Thirteen states have created counseling hot-lines to help those at risk of foreclosure.

Nine states have created loan funds to help refinance loans or provide short-term loans to help borrowers overcome financial difficulties.

In contrast, the U.S. Senate just passed a bill that takes modest steps to help families in danger of losing their homes but gives billions of dollars in tax breaks for automakers, airlines, alternative energy provides, and home builders.  While passing on a modest tax credit to purchasers of foreclosed properties, the bill provides tax credits that amount to roughly $6 billion over 10 years to various industry interests.  Instead of the feds giving more help to airlines and automakers than people who are losing their homes, they might do better to look at steps the states are taking to deal with the crisis.

More Resources

Growing-Economy

Rising Tax Equity on the Chesapeake

Maryland helped solve a budget crisis and get rid of an unpopular business tax on the computer industry with a simple solution-- ask the richest 6,000 households in the state making more than $1 million to pay more of their fair share in taxes.  By raising the top income tax rate this past week to 6.5%, Maryland will raise an additional $328.5 million over the next three years. 

This is part of a broader trend in Maryland over the last few years of converting what had been a flat tax rate of 4.75% on income over $3,000 into a code that progressively raises the rate as income rise.  Last year, the state added a 5% rate on single filers earning more than $150,000 and a rate of 5.5% on those making more than $500,000. 

One reason a graduated income tax is so crucial is that other state taxes, especially sales taxes, claim a much larger share of working families income.  As a 2003 study by the Institute on Taxation and Economic Policy showed, median income Marylanders were paying 8.8% of their income in state and local taxes, while the wealthiest state residents were only paying 5.1%.  

Maryland is following the trend in number of states of creating new higher income tax brackets for wealthier residents.  A number of other states are also reducing the tax burden on poorer residents through expanded state Earned Income Tax Credits and other exemptions for lower-income families.  In almost all states, states still tax a larger percentage of working families' income than the wealthy's, but these policies are at least a start in moving towards greater tax equity.  As a recently released report by the Center on Budget and Policy Priorities emphasized, making state tax systems more progressive is also a way to mitigate the broader trend of growing before-tax economic inequality.

More Resources

Research Roundup

Reframing the Immigration Debate:  The Rockridge Institute has a new paper, To Respect and Protect: Expanding our Discourse on Immigration, that emphasizes that progressives must change the "frame" on immigration from one of conservative fears to one emphasizing the global interdependence of working families in different countries and how a more progressive immigration policy, including ending the economic exploitation of "economic refugees" (the Rockridge term) will benefit our whole society.

In How Errors in Basic Pilot/E-Verify Databases Impact U.S. Citizens and Lawfully Present Immigrants, the National Immigration Law Center outlines that the program has gross deficiencies that, if the program is expanded in states, threaten the livelihood of hundreds of thousands of work-authorized immigrants and citizens who may be either wrongfully dismissed from or refused employment.

Policies for Unmarried Women: Often overlooked as a political constituency, unmarried women have unique needs and political concerns, according to a new report by the Center for American Progress.   This group makes less pay for the same work, lack health insurance more often, and often raise children without needed support, such as child care or other policies to ease balancing work demands and children.

Restoring Voting Rights: 5.3 million Americans are denied the right to vote because of a felony conviction, a bar that largely derives from Jim Crow segregation days to lock freed slaves out of the voting process, according to a new report by the Brennan Center for Justice.  The report proposes automatic post-incarceration voting rights restoration in the 25 states that still disenfranchise people who are no longer in prison. 

Obscene Executive Pay: The AFL-CIO has released their 2008 Executive PayWatch website, which exposes CEO pay packages, highlighting the pay of chief executives whose companies helped create the subprime mortgage meltdown.  De facto, the site reveals that those chief executives were being rewarded with big personal payoffs for causing the financial meltdown that has devastated the lives of so many working families.

Costs of Health Care Cost-Sharing: While many conservatives promote patient cost-sharing as a health care reform, a new study by the Kaiser Family Foundation finds that low-income families most needing health care don't have the financial assets to pay the high cost-sharing burden under such proposed policies.  The Center for American Progress in a new report emphasize the such cost-sharing also deters preventive medicine and drives up health care costs in the longer-term.

Dying for Lack of Health Coverage:   Families USA has continued to release more state reports in its Dying for Coverage series, which highlight state-by-state that 18,000 adults nationwide died in 2006 because they did not have health insurance coverage.

PBS's NOW has a new resource page up outlining the various ways states tax the poor -- and a few of the ways states are working to ease that burden.


Please email us leads on good research at research@progressivestates.org

Resources

Tough Wage Enforcement Law Approved in Iowa Senate; Anti-Immigrant Measures Rejected

IA SF 2416

IA Sen. Joe Bolkcom - "Don't create scapegoats: Enforce wage laws for all," Des Moines Register, April 2, 2008.

Progressive States Network - Cracking Down on Misclassification of Workers-- And Raising Tax Revenue 

NELP - From Anti-Immigrant to Pro-worker: What can states and cities do about immigration and workers' rights

States Blowing Past Feds in Fighting Foreclosure Crisis

Maryland - HB 365/SB 216, HB 360/ SB217, HB 361/SB 217

Pew Charitable Trusts - Defaulting on the Dream- State Respond to America's Foreclosure Crisis

Washington Post - States Tackle Foreclosures in Absence of Federal Help

New York Times - Foreclosures Push State to Try a Mix of Solutions

Rising Tax Equity on the Chesapeake

Maryland Budget & Tax Policy Institute

IETP -  Maryland Taxes Hit Poor & Middle Class Harder than the Wealthy

Progressive States Network - Tax Relief to Help Low-Wage Washington Residents

Center on Budget and Policy Priorities - Pulling Apart: A State-by-State Analysis of Income Trends

Events

Young Elected Officials National Convening

April 23th
Little Rock, Arkansas - William J. Clinton Presidential Library

The largest gathering of young progressive elected leaders in the country will meet.  On April 23rd, PSN's Policy Director, Nathan Newman, will be participating in two training sessions, one on building progressive tax structures at the state and local level and a second on immigration reform.


Good Jobs First Conference

May 7th & 8th
Baltimore/D.C. area

Registration is now open for Good Jobs First's national conference on May 7 and 8 near BWI Thurgood Marshall Airport, located between Baltimore and Washington, DC. Come meet the nation's top campaigners, researchers and experts on economic development accountability and smart growth for working families.

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The Stateside Dispatch is written and edited by:

Nathan Newman, Policy Director
J. Mijin Cha, Policy Specialist
Julie Schwartz, Policy Specialist
Christian Smith-Socaris, Policy Specialist
Adam Thompson, Policy Specialist
John Bacino, Operations Manager
Marisol Thomer, Outreach Coordinator

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

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