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Groundbreaking Living Wage Victory for Chicago Retail Workers




Thursday, July 20, 2006

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Rewarding-Work

Chicago: Groundbreaking Retail Workers Living Wage Law Passes

By a vote of 35 to 14, the Chicago city council yesterday approved a new ordinance requiring large retailers in the city to phase in a living wage for their employees of $10 per hour plus $3 per hour in benefits-- the highest minimum wage established for any industry sector in the country. If signed by the mayor, the law would raise pay for tens of thousands of workers in retailers such as Wal-Mart, Target, Toys R Us, Lowe's and Home Depot. A broad coalition of organizations including ACORN, labor unions and church groups worked together for its passage.

As discussed here last month, this law is part of an emerging trend of states and local governments establishing different, higher minimum "living wage" standards for selected industrial sectors, from larger employers to tourist zones to hotels. While innovative in the modern era, the Chicago law is a return to the historic practice of federal and state laws creating different minimum wage levels both between and within different industries.

Because the Chicago ordinance allows employers to pay higher wages in lieu of paying the increased benefits required under the law, the law is clearly not preempted by federal ERISA law, as this legal analysis by the Brennan Center explains. “Every federal court of appeals that has reviewed a wage law like the Chicago ordinance," explains Paul Sonn, deputy director at the Brennan Center, "has upheld the law under ERISA.”?

And while large retailers covered by the ordinance are making noises about not building new stores in the city, the reality is that after Santa Fe created a living wage of $9.50 per hour for large employers, Wal-Mart asked for approval to build a new Supercenter. The fact that leading retailer Costco already pays all its employees a living wage of $10 per hour plus benefits nationwide emphasizes that "big box" retailers can thrive paying a living wage. See this economic analysis of why the expansion drive by large retailers means higher wage standards will not deter their growth.

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Rewarding-Work

CA: State Rules FedEx Drivers Employees, Not Contractors

For years, the delivery company FedEx has claimed that its ground drivers are not employees but independent contractors-- meaning the company didn't have to pay for workers compensation, unemployment insurance or extend a range of other worker protections.

But along with two Internal Revenue rulings, decisions by the California Unemployment Insurance Appeals Board have found that FedEx exercised such strict control over its drivers that their nominal independent status was a facade designed to undermine the labor rights of employees and evade millions in taxes owed the state. The ruling in California is part of a trend of governments reining in abuses by companies misclassifying workers as independent contractors.

In February, the National Labor Relations Board ruled that 23 FedEx drivers in Worcester, Massachusetts had the right to form a union despite their nominal "independent" status.  Across the country, hundreds of employees in thirty states have filed class-action lawsuits against FedEx Ground over the company's abuse of independent contractor laws.

As this Business Week profile highlights, abuse of independent contractor laws is one reason FedEx has been able to take market share from United Parcel Service, where employees have been able to form unions and demand better pay unlike FedEx Ground which has claimed exemption from labor laws based on its employees "independent status."

FedEx is just a high profile example of an all too common abuse of workers by misclassifying them as independent contractors. Beyond action by government agencies, states are increasingly proposing new legislation to tighten these rules to protect employees, as this guide to Combating Independent Contractor Misclassification in the States by the National Employment Law Project explains.

More Resources

Increasing-Democracy

Vote-by-Mail Earns Backing from NAACP, Senator Kerry

Supporters of Oregon's unique universal vote-by-mail system got a serious leg up this month when the NAACP adopted a resolution formally endorsing the system. The NAACP joins the AFL-CIO in publicly backing the system, which has gained widespread support among representatives of working families for the way that it increases flexibility for voters and also serves as a reminder of otherwise low-profile elections for many of us in our busy day-to-day lives.

Oregon's system also made a cameo in the Congressional debate over the Voting Rights Act when Senator Ron Wyden of Oregon made a plug for the process that has served his home state so well. Shortly thereafter, Senator John Kerry joined in, saying that universal vote-by-mail "works brilliantly.... People have a lot of time to be able to vote. They don't have to struggle with work issues, being sick, other kinds of things. And they have plenty of time to have the kind of transparency and accountability that really makes this system work."

With multiple states looking to liberalize vote-by-mail and absentee voting laws, Progressive States compiled a number of "best practices" on the subject.

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Research-Roundup

Family Friendly Business Rules, Sales Tax Reform, Expensive Job Non-Creation, and Worker Safety in Small Businesses

Got research we should highlight? Let us know: research@progressivestates.org.

Highlighting the strains on working families with kids, the Center for Law and Social Policy (CLASP) released a report on how government can encourage employers to better arrange work schedules so that families can better juggle work and family responsibilities and how such family-friendly policies can help the business bottom-line through improved job retention, increased productivity and reduced health care costs.

In a new report, Making the State Sales Tax Pull Its Weight, New Jersey Policy Perspectives (NJPP) highlights how expanding the sales tax to cover more services would allow states to keep the overall rate lower. Out of 168 services -- from dating services to tanning salons -- states apply the sales tax from fewer than 20 to covering all services.

NJPP also released a report highlighting how states are often pitted against each other, paying to relocate business offices between states without creating a single new job, a case in point being New Jersey, Pennsylvania, Delaware and Maryland paying a total of $8.1 million to AAA auto service as it played musical chairs moving offices between the states.

A new analysis by RAND finds that in all business sectors except retail, fatality rates from injury in work sites with 1-19 workers are 4 to 10 TIMES higher than larger work sites. The policy implication is that states need to encourage more focus by worker safety agencies on programs to monitor smaller establishments, especially smaller worksites within larger firms.

The good news, according to the US Department of Health and Human Services, is that the number of children in foster care has declined slightly to 518,000 children in foster care across the country.  The bad news is that they are older and staying longer in foster care and 19,000 of the children "age out" of the system each year without ever being adopted.

Chicago: Groundbreaking Retail Workers Living Wage Law Passes

Chicago Retail Workers Living Wage Ordinance
ACORN, Big Box Living Wage Ordinance Passes in Chicago!
Brennan Center for Justice, Chicago’s Retail Living Wage Law Resources Page
Brennan Center, "Legal Implications of Maryland ERISA Ruling for Chicago Retail Living Wage Law"
Stateside Dispatch, Regulating Wage Standards for Selected Employers
Wal-Mart Watch, "Shameless: How Wal-Mart Bullies Its Way Into Communities Across America"

CA: State Rules FedEx Drivers Employees, Not Contractors

FedEx Watch
NELP, Combating Independent Contractor Misclassification in the States
The NewStandard, FedEx Drivers Fight for 'Employee' Status, Rights (see resources in right column)
Business Week, The Ground War At FedEx

Vote-by-Mail Earns Backing from NAACP, Senator Kerry

Vote by Mail Project
Progressive States Network, Universal Vote-by-Mail LegAlert
Bill Bradbury, "Vote by Mail: the Real Winner is Democracy," Washington Post
Sam Rosenfeld, On the Oregon Trail, The American Prospect
"Vote by Mail: An Exchange," The American Prospect

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Eye on the Right

Wal-Mart is smarting after having Chicago's city government tell them they need to act like the big company they are and pay their workers a decent wage. But this is hardly the first time the Wal-Mart and Chicago have come to blows. As Wal-Mart Watch makes clear in its report "Shameless: How Wal-Mart Bullies Its Way Into Communities Across America," Chicago bullied its way into Chicago in the first place, just as it has in other countries. In Chicago, the tactics included harassing phone banks targeting city council members and accusing its opponents of racism, in an attempt to foment racial divides in the city. Harassment and inciting hate? That's not exactly being neighborly.

People to Watch: Filmmaker Robert Greenwald

Whether shining his eye on the rightwing media in Outfoxed, on corporate greed in Wal-Mart: The High Cost of Low Price, or on corrupt politicians in The Big Buy: Tom DeLay's Stolen Congress, Robert Greenwald uses the art of film to tell stories about way our society is being taken over by corporate greed.

"DeLay bought control in the United States House of Representatives. And the way that they did it was by buying the statehouses."

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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.

Suggestions

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