Conservatives Confused as State Minimum Wage Attacks Fail

Legislators in Arizona conceded defeat this week in an attempt to gut the state’s minimum wage law. House Majority Leader Steve Court admitted that the law, enacted in a landslide 2006 ballot initiative with 65% of the vote, is still unassailable. Court’s decision wraps up a rough couple of months for legislators and lobbyists intent on rolling back minimum wage laws.

First, presidential candidate Willard Mitt Romney went off-script for over a month strongly supporting annual increases in the minimum wage, and inadvertently lending support to measures to raise the minimum wage in at least fifteen states. After conservative leaders succeeded in pressuring Romney to retract his position, the candidate’s statements have lacked conviction and consistency.

Earlier this month, a bold attack on Florida’s minimum wage law also failed when legislators realized how unpopular and harmful it was. The Florida bill targeted restaurant servers and other tipped workers, decreasing their base wage rate depending on how much they earn in tips. Attempts to roll back restaurant workers’ wages are the most prevalent in attacks on minimum wage this year. A similar bill has been introduced in Minnesota, and the failed Arizona bill originally targeted tipped workers (legislators changed course to target the 2006 law’s core provision of annual increases in the minimum wage to keep pace with inflation.)

In essence, the tipped-employee wage indirectly authorizes employers to steal tips from their employees by crediting them against wages. Restaurant association lobbyists have tried to sell the idea on the basis that most tipped workers have the audacity to take home more than minimum-wage incomes, despite some restaurant owners’ desire to pay them as little as possible. Also occurring in multiple states are bills to force sub-minimum wages on younger workers and bills to curtail or repeal annual wage increases in states like Arizona that have such provisions. Such attacks are expected to continue, as much as anything because they provide a vehicle for conservatives to push the overarching idea that what’s bad for workers is good for business.

At the same time, proposals to raise the minimum wage are gaining steam as legislative sessions continue. Following the Delaware Senate’s early passage of a minimum wage bill, measures in New Jersey, Connecticut, Iowa, and Massachusetts have advanced, and legislative leaders in Illinois and New York have announced plans to do so in 2012. A joint op-ed by Connecticut House Speaker Chris Donovan, New Jersey Assembly Speaker Sheila Oliver, and New York Assembly Speaker Sheldon Silver calling for minimum wage increases in their states gained national attention this month. Articles reporting on their statement have appeared in newspapers throughout the country. In contrast to the unpopularity of attacks on the minimum wage, the public’s enthusiasm for these measures gives voice to a deep belief in the promise of fairness and economic security that the minimum wage represents.

Several new reports out this month drive home the realities the public is responding to. A new analysis of Internal Revenue Service data shows vastly different trends in income inequality following the Great Depression and the Great Recession. Where policy changes favoring direct spending on reemployment, infrastructure, and progressive taxation and regulation in response to the Depression resulted in rising incomes and broadening prosperity, policies promoting austerity, tax reductions, light regulatory reforms, and so-called “supply-side” responses (e.g., the TARP and auto industry bailouts) have resulted in falling wages and increasing inequality.

The importance of raising the minimum wage in this picture is obvious from reports by the National Low Income Housing Council and the Center on Economic and Policy Research. NLIHC’s Out of Reach 2012 report shows that, in every state, the minimum wage is insufficient to allow workers to afford decent housing. The council calculated how many hours per week a minimum wage employee would have to work to afford a two-bedroom apartment, which ranges from 63 hours/week in Arkansas to 175 hours/week in Hawaii. CEPR’s analysis of historical minimum wage rates explains the mismatch between our nation’s wage floor and the economic realities facing the 99%. The real value of the minimum wage rate has fallen by over 30% since its peak in 1968 when measured against standard inflation measures. However, CEPR also finds that, had the minimum wage kept pace with the overall productivity of the economy as it did very closely from 1950-1970, it would be $21.72 in 2012 – three times what it is today. By that measure, minimum wage workers in all but five states would be able to afford housing on just one full-time job today.

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