Wage Standards

Washington state Governor Christine Gregoire signed a bill to combat wage theft this week, adding Washington to a growing number of states and counties, including Miami-Dade County, cracking down on employers who underpay workers (many of them undocumented immigrants) and violate minimum wage and overtime rules. 

As part of the Progressive States Network’s 2010 Shared Multi-State Agenda, we are advancing a corporate transparency initiative in coordination with key allies and experts.  Demand for transparency in government is rising, but most states still do not collect even the most basic, critical data from recipients of state grants, state contracts or tax breaks.  In this Dispatch, we will examine the need for corporate transparency, recent cases relating to the subject, and how the policy will benefit states dealing with massive deficits.

In this Dispatch, we emphasize that any stimulus spending has to be tied to increased accountability and transparency in spending decisions, especially by government contractors who often operate like a shadow government with little oversight.  One key reality is that those most in need often don't receive help from government spending without transparency and accountability measures built into the rules.  While the recent federal recovery plan made real strides in expanding such accountability, additional measures are still needed if the recovery plan is going to deliver real equity in our economic recovery.

New Mexico Governor Bill Richardson recently signed a wage enforcement bill (H 489) to allow underpaid workers to collect their back wages plus twice that amount in damages. The bill was backed by community groups and labor unions as well as the New Mexico Department of Workforce Solutions.  New Mexico now becomes the eighth state that allows workers to collect treble damages against employers violating the minimum wage – a key deterrent to employers to ensure compliance with the minimum wage. 

Given the central role of private contractors in delivering public services, this Dispatch continues our series of Privatization Updates (see November's edition). Today we focus on current privatization debates in the education, prison and mental health sectors -- and what states are doing to increase accountability for contractors.

Recently conservatives in Montana sought to roll back the annual cost-of-living wage increases for minimum wage workers that voters overwhelmingly approved in 2006 by 73-27%. Montana is one of twenty-seven states (plus the District of Columbia) that has a minimum wage higher than the federal minimum wage, and one of eleven states that index the minimum wage to the consumer price index. Montana progressives successfully fought a conservative push by the restaurant industry to keep wages stagnant.

Washington State minimum wage workers got a raise January 1st to $8.55 per hour -- now the highest minimum wage in the country.   Like nine other states, Washington automatically increases its minimum wage each year at the rate of inflation to make sure families don't face a de facto pay cut as rising costs eat into family budgets.  Because the federal minimum wage is not indexed to inflation in this way, we have seen a decline in its value from $9.34 in inflation-adjusted dollars down to just $6.55 per hour this past year.  This trend highlights why state efforts to index the minimum wage to keep up with inflation are so critical.

According to The Wall Street Journal, "Fed and Treasury officials have identified the disease. It's called de-leveraging, or the unwinding of debt. During the credit boom, financial institutions and American households took on too much debt."  But let's not buy into a false equivalence of "financial institutions" and those "American households" borrowing beyond their means.

Instead of allowing the right-wing to scapegoat undocumented immigrant workers, Progressive States Network will be working with progressive leaders across the country to introduce wage enforcement laws that emphasize that native and immigrant workers both suffer under illegal working conditions. See State Immigration Project: Policy Options for 2009 for the full range of immigration policies Progressive States Network is supporting in upcoming legislative sessions.

Today, the Progressive States Network is releasing a new report: The Anti-Immigrant Movement that Failed: Positive Integration Policies by States Still Far Outweigh Punitive Policies Aimed at New Immigrants.   The Executive Summary is available online, as well as the full report in PDF and HTML format.