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Wal-Mart Deal for Higher Wages in Chicago Highlights Need for Industry-Specific Wage Legislation

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Wal-Mart Deal for Higher Wages in Chicago Highlights Need for Industry-Specific Wage Legislation

WAGE STANDARDS AND WORKPLACE FREEDOM
For the first time in the nation, Wal-Mart has agreed to a higher wage standard at a new store to be built in Chicago, Illinois. The retail giant’s commitment was part of an agreement to assure City Council support for zoning approvals, on which the Council voted on Wednesday. This agreement shows that state and local governments still have good opportunities to raise wage and labor standards, particularly on an industry-specific basis. While the Chicago deal represents a first for Wal-Mart, it actually falls short of other actions cities and states are taking to set higher industry-specific wage and labor standards.

Indiana Supreme Court Upholds Restrictive Voter ID Law

Clean And Fair Elections
In a disappointing turn of events, Indiana’s Supreme Court ruled 4-1 in favor of the state’s voter ID law, overturning last year’s decision by the Indiana Court of Appeals that deemed voter ID requirements unconstitutional partly because it treated those casting absentee ballots differently from those at voting booths. The problem is that, while most Americans have government-issued ID’s, studies show that 6-10% of eligible voters don’t have a state-issued driver’s license or ID card, which amounts to potentially disenfranchising as many as 20 million people nationwide who are disproportionately poor, urban, non-white, and elderly.

Anti-Immigrant Amendments Fail in Massachusetts State Legislature

Integrating Immigrants Into Our Communities
Yet another set of anti-immigrant proposals, this time offered as last-minute amendments to a Massachusetts state budget bill, failed to grain traction last week. Twenty seven pages of draconian anti-immigrant amendments were reduced to text that simply re-states existing bars on undocumented residents applying for public benefits. This triumph of reason over politics means Massachusetts joins several other states where anti-immigrant policies have amounted to nothing more than flawed political opportunism and hot air. 

Preventing Loss of Medicaid Drug Rebate Funds for States

Healthcare For All
While the new Affordable Health Care law provides a variety of funding opportunities for states, a provision governing how rebates on drug prices negotiated for prescription drugs are shared could shift billions of dollars from cash-strapped states to the federal government. However, if states move quickly, they can act aggressively to secure both federal best price rebates and state supplemental rebates that can realize Medicaid rebates as high as 40-50% - increasing the rebate portion states hold onto and off-setting losses.

Wal-Mart Deal for Higher Wages in Chicago Highlights Need for Industry-Specific Wage Legislation

WAGE STANDARDS AND WORKPLACE FREEDOM   * TIM JUDSON

For the first time in the nation, Wal-Mart has agreed to a higher wage standard at a new store to be built in Chicago, Illinois.  The retail giant’s commitment was part of an agreement to assure City Council support for zoning approvals, on which the Council voted Wednesday.  The deal also concludes a six-year fight over what will be only Wal-Mart’s second store in the Windy City.  As we reported previously, Wal-Mart reached a stalemate with labor unions in 2006, after the City Council passed an industry-specific wage standard for big box retailers, which was later vetoed by Mayor Richard M. Daley.

Under the new agreement, Wal-Mart commits to a starting wage of $8.75, $0.50 per hour higher than the minimum wage for new employees.  After one year of employment, Wal-Mart will raise workers’ wages by $0.60 to $9.35 per hour.  Wal-Mart also agreed to pay prevailing wage, use union contractors to build the store and to provide $20 million to local non-profits over five years.  The company claims the deal paves the way for it to move forward with plans to open two-dozen more stores in Chicago by 2015, although the agreement does not cover any other stores. 

Legislation Needed to Lock-in Higher Wage Standards:  Despite conventional assumptions about the economy, the Wal-Mart case shows that state and local governments still have good opportunities to raise wage and labor standards, particularly on an industry-specific basis.  Still, this is a an agreement for only one store, rather than the city-wide policy embodied in the original ordinance approved by the City Council.  Wal-Mart was able to negotiate its compromise by fragmenting the opposition with promises of temporary benefits to the building trades and non-profits and avoiding broader legislation.  If Chicago enacted its 2006 wage ordinance, the local economy would have benefited from thousands of workers throughout the city’s big-box retail sector being lifted out of poverty and depending less on public services. 

While the deal represents a first for Wal-Mart, it falls short of other actions cities and states are taking to set higher industry-specific wage and labor standards.  For instance, in 2008 Los Angeles passed a law that sets a living wage standard at all hotels near the LAX airport; and in 2009, New York state passed a law requiring labor peace agreements for all hotels developed or financed by the state through its public benefit corporations.  New York is also considering a bill that would set a prevailing wage standard for building service workers employed by public utilities. 

A similar fight is looming over Wal-Mart’s plans to build its first store in New York City, where the City Council in December stood strong by rejecting another retail project because the developer would not agree to a living wage standard.  According to City Council Speaker Christine Quinn, the question for elected officials is not about creating jobs or not creating jobs, but about what kind of jobs the city should be creating:  “We don't want companies that have led the nation in law suits being brought against them by workers,” she said.  “We don't want companies that have the largest class-action in history brought against them.  We don't want companies where women are, over and over, paid less than men and not promoted.”

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Indiana Supreme Court Upholds Restrictive Voter ID Law

Clean And Fair Elections   * CRISTINA FRANCISCO-MCGUIRE

In a disappointing turn of events, Indiana’s Supreme Court ruled 4-1 in favor of the state’s voter ID law, overturning last year’s decision by the Indiana Court of Appeals that deemed voter ID requirements unconstitutional partly because it treated those casting absentee ballots differently from those at voting booths.  But in the end, the Indiana Supreme Court majority opinion stated, “It is within the power of the legislature to require voters to identify themselves at the polls using a photo ID.”

Disenfranchising Voters:  While most states allow non-photo identification to establish identity, such as utility bills, payroll checks, or other government documents, Indiana only accepts photo ID’s issued by the state or federal government.  Though the state allows those without ID’s to vote on provisional ballots, their votes are only counted if they are able to present proper ID within ten days.

The problem is that, while most Americans have government-issued ID’s, studies show that 6-10% of eligible voters don’t have a state-issued driver’s license or ID card, which amounts to potentially disenfranchising as many as 20 million people nationwide who are disproportionately poor, urban, non-white, and elderly. 

  • The American Association of People with Disabilities further estimates that more than three million people with disabilities similarly do not possess state-issued photo ID. 
  • Some US citizens — such as Native Americans born on reservations, and elderly African Americans born in the South under the care of midwives — were never issued birth certificates in the first place, a major roadblock to obtaining a state-issued photo ID.
  • Victims of natural disasters, such as Katrina, may also have had their original birth certificates destroyed. 

A De Facto Poll Tax:  In all cases, replacing these documents can be expensive and time-consuming — a new birth certificate can cost more than $40, while a new passport costs $97.  Replacement citizenship documents for naturalized Americans costs $220.  De facto poll tax aside, processing these requests can take as long as a year — during which time an otherwise eligible voter cannot vote.

And photo IDs don’t always reflect current information.  Surveys show that only 48% of voting-age women with ready access to their birth certificates have a certificate with their current legal name, while only 66% of voting-age women with access to any proof of citizenship have a document with their current legal name.  10% of all voting-age citizens have a photo ID that does not reflect their current address and current legal name.  Among those aged 18-24, the percentage increases to 18%. 

The burden of voter ID laws is real, and suppresses the vote of a demographic that is overwhelmingly poor, urban, non-white, and elderly.  The decision of Indiana’s Supreme Court will only serve to further disenfranchise an already-disenfranchised population.

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Anti-Immigrant Amendments Fail in Massachusetts State Legislature

Integrating Immigrants Into Our Communities   * RAHUL PATEL

Yet another set of anti-immigrant proposals, this time offered as last-minute amendments to a Massachusetts state budget bill, failed to gain traction last week.  Twenty-seven pages of draconian anti-immigrant amendments were reduced to text that simply re-states existing bars on undocumented residents applying for public benefits.

When originally approved on May 28th, the amendment included a slew of anti-immigrant measures that sought to scapegoat undocumented immigrants and prohibit their access to work, shelter, education, and safety in the state.  In response, the Student Immigrant Movement and other immigrant advocates organized the MassHope 2010 vigil outside of the State House to highlight the knee-jerk, anti-immigrant nature of the amendments.  After 19 days of rallying, protesters celebrated victory.

Failed Anti-Immigrant Legislation Trend :  This triumph of reason over politics means Massachusetts joins several other states where anti-immigrant policies have amounted to nothing more than flawed political opportunism and hot air. 

  • Much of this noise emanates from states whose legislatures have already closed their 2010 sessions, making these promises to introduce legislation mirroring Arizona’s controversial recent immigration law, SB 1070, premature at best. Bills for the 2011 state legislative session will not be considered or voted upon for months, leaving their ultimate success or failure still unknown. 
  • Several Governors, including Texas’ Rick Perry, have already declared their intention to veto broad anti-immigrant legislation based on Arizona’s heavily criticized SB 1070. 
  • In other states such as Rhode Island, whose anti-immigrant bill was killed by the Speaker of the House of Representatives even before it received a hearing, support for anti-immigrant politics and rhetoric is simply not as broad as legislators may think. 

As the White House attempts to revive efforts to overhaul federal immigration laws, public and voter support for comprehensive immigration reform remains strong.  According to polls commissioned by the group America’s Voice, voters on either side of the partisan aisle want common-sense, federal immigration reform that reflects American values, welcomes immigrants and provides them a pathway to citizenship.

Rahul is a summer immigration policy intern at Progressive States Network and a Drum Major Institute Scholar.
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Preventing Loss of Medicaid Drug Rebate Funds for States

Healthcare For All   * ENZO PASTORE

While the new Affordable Health Care law provides a variety of funding opportunities for states, one provision in the health law that could shift billions of dollars from cash-strapped states to the federal government.  Under the National Medicaid Drug Rebate Program created by the Omnibus Budget Reconciliation Act of 1990, drug manufacturers are required to enter into agreements that provide rebates for Medicaid purchased drugs, establishing a 15% minimum level of rebates.  Up until now, the rebates were divided between the states and the federal government.  But under the new health reform law, a significant portion of the rebates will go solely to Washington beginning this year.

Changes in Federal and State Rebate Share:  On the positive side, the Affordable Care Act now requires greater discounts in Medicaid rebates by increasing the minimum rebate level from 15% to 23.1% for most brand name medications.  This increase, which also applies to manufacturers of generics, is projected to raise $36 billion over 10 years.  Under the old policy, states sent Washington a proportion equal to the share of Medicaid funding the federal government paid.  But now, the new federal reform law allows the federal government to keep 100 percent of the rebate that falls within the 15.1 to 23.1 percent range.  Any rebates above 23.1 percent will continue to be shared.  According to the office of Senate Majority Leader Harry Reid the change was necessary to help pay for a $434 billion 10-year increase in federal Medicaid funding.

Some States Stand To Lose Millions:  Based on 2009 Medicaid data, states received average rebates of 38.5 percent a year ago, well above the previously required 15 percent, so the change will cost them dearly.  California, for instance, could lose as much as $50 million next year alone because of the changes.  Indiana predicts losses of $400 million over the next 10 years.  And because the new policy is retroactive to 2010, Vermont stands to lose $2.3 million in fiscal year 2010 and $4.2 million in FY 2012. 

What States Can Do:  If states move quickly, they can secure both federal best price rebates and state supplemental rebates that can realize Medicaid rebates as high as 40-50%- increasing the rebate portion states hold onto and offsetting losses.

One key step is to secure clear state data on base prices from which rebates are calculated.  Currently, the federal government is barred by a court order from sharing data on the Average Manufacturer Price (AMP) and federal Best Price with the states, so since states don’t get this price data reported to them, state laws need to be in place to require drug companies to report AMP and best price directly to them.

Only Maine and Vermont have apparently passed such reporting laws.  To respond to this emergency, Maine Rep. Sharon Treat, who also serves as Executive Director of the National Legislative Association on Prescription Drug Prices (NLARx), recommends that State Medicaid directors and State Legislatures need to immediately review their preferred drug lists.  They need to make changes from a clinical perspective to reflect retroactive changes in rebate policies that will affect their budgets this year.  States also need to pass a state drug price reporting law.

See also model AMP/best price legislation to address this data reporting issue.

Medicaid Rebates Now Available for Medicaid Managed Care Plans:  One more twist on the changes affecting Medicaid rebates is that another provision of the federal law will help to offset the loss of rebate dollars in some of the states.  For the first time, drug rebates will be allowed for drugs sold to State Medicaid managed care plans.  Forty-one states use managed care plans and in total this accounts for about 70 percent of Medicaid enrollees across the country.  However, only 16 of them depend on the managed care programs to administer drug benefits, while others have opted to pay for many drugs directly to get rebates.  Clearly the new managed care policy strongly favors those 16 states.  The provision will encourage more states to use managed care plans for drug coverage, which could lead to a reduction in drug spending.  Arizona is one of the states that will see a major benefit.  Its entire Medicaid program is run through managed care plans, so the state did not benefit in the past from the federally required rebates.

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Research Roundup

Economic and Revenue Crisis in the States

  • New Fiscal Year Brings More Grief for State Budgets, Putting Economic Recovery at Risk - The states’ cumulative budget shortfall will likely reach $140 billion in the coming year, according to this report by the Center on Budget Policy Priorities.  Without additional federal aid, states will make even deeper spending cuts and more tax increases than previously planned, raising the risk that the nation will fall back into recession as the loss of Americans’ spending power ripples through the economy.
  • Today’s Unemployment Crisis by the Numbers - There are currently nearly 15 million Americans unemployed and nearly half of those unemployed (46 percent) have been out of work and actively seeking a job for at least six months, a post-World War II record high, according to this memo by the Center for American Progress and the National Employment Law Project.  Explaining how the unemployment system works, the numbers of workers involved, and how renewal boosts the economy, the report emphasizes why it is crucial for Congress to renew the unemployment benefits it allowed to expire in early June.

Rising Wage and Income Inequality

  • Another Day, One Less Dollar  - This new analysis of wage trends for high school and college graduates by the Economic Policy Institute shows that wages have stagnated since the year 2000.  Inflation-adjusted wages for workers holding a bachelor's degree but no advanced degree were $1,030 per week in 2000 and declined slightly to $1,025 per week in 2009.  The problem predated the current recession and it will likely be many years before college graduates - or any workers - see substantial wage growth.
  • Income Gaps Between Very Rich and Everyone Else More Than Tripled In Last Three Decades, New Data Show — Analyzing new Congressional Budget Office (CBO) data, this report by the Center on Budget Policy Priorities finds that between 1979 and 2007, the average after-tax incomes for the top 1 percent rose by 281 percent after adjusting for inflation — an increase in income of $973,100 per household.  If that growth in income had been shared more broadly, the median after-tax household income would now be $68,342—or an extra $13,000 per year.  The report looks at trends in inequality, including how the Bush era tax cuts exacerbated income gaps.

How Health Reform Saves Consumers and Taxpayers Money: The Affordable Care Act Lowers Costs and Improves Quality  - The new health reform links a commitment to coverage with a commitment and a strategy to contain health care costs, which is detailed in this report by the Center for American Progress.  It details how it will reduce administrative costs for small businesses and individuals and modernize our health care payment and delivery system to reduce health care spending.

Texas Textbooks: What happened, what it means, and what we can do about it — This People for the American Way report details how religious Right leaders in Texas have been waging war against science and history for the past few decades, with a primary target and battleground over the statewide approval process for public school textbooks.  It details how it happened, what it means and what people are doing about it.

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

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Steps Forward

AZ: Court Will Hear Employer Sanctions Law Challenge

AK: Parnell Signs Bills to Aid Youth Court, Traumatized Jurors

NJ: Wind Bill Goes to Gov. Christie for Approval


Steps Back

TN:  Gov. Bredesen Signs Anti-Immigrant Bill, Says He Didn’t Think Bill Was Necessary

MI: Job Retraining Efforts Sputter

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Full Resources from this Dispatch

Wal-Mart Deal for Higher Wages in Chicago Highlights Need for Industry-Specific Wage Legislation

National Employment Law Project - The Road to Responsible Contracting
Good Jobs First - High Road or Low Road? Job Quality in the New Green Economy
Good Jobs First - Making the Connection: Transit-Oriented Jobs and Development
Economic Policy Institute - The Employment Impact of a Comprehensive Living Wage Law, Evidence from California

Indiana Supreme Court Upholds Restrictive Voter ID Law

Progressive States Network - Voter ID Law Struck Down by Indiana Appellate Court
Demos Briefing Paper Series: Challenges to Fair Elections -  Issue: Voter ID/proof of citizenship requirements for voting and registration
Center on Budget and Policy Priorities - Survey Indicates House Bill Could Deny Voting Rights to Millions of U.S. Citizens
NAACP Legal Defense Fund - Restrictive Voter Identification Laws: A Barrier to the Ballot Box for Eligible Voters
The Brennan Center for Justice - Citizens Without Proof: A Survey of Americans’ Possession of Documentary Proof of Citizenship and Photo Identification
League of Women Voters v. Rokita

Anti-Immigrant Amendments Fail in Massachusetts State Legislature

Immigration Policy Center - The Legal Challenges and Economic Realities of Arizona's SB 1070
Progressive States Network - Arizona and the Nation: A Failing State Versus Positive Approaches to Immigrant Integration
Progressive States Network - Arizona “Copycat” Anti-Immigrant Bill Killed in Rhode Island Without Hearing
America’s Voice - Public Opinion on Immigration Reform

Preventing Loss of Medicaid Drug Rebate Funds for States

CMS - National Drug Rebate Agreement
Kaiser Health News - States' Medicaid Funds Tapped For Federal Health Overhaul
National Legislative Association on Prescription Drug Prices - Special Report: States Must Act Now to Preserve Medicaid Drug Rebates!
National Legislative Association on Prescription Drug Prices - Model Law: Manufacturer Drug Price Reporting
Inside Health Reform - States Upset With Guidance On Medicaid Dug Rebates, Still Have Questions
Inside Health Reform - Reid Bill Would 'Recapture' $20 Billion In Medicaid Rebates From States
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The Stateside Dispatch is written and edited by:

Nathan Newman, Executive Director
Nora Ranney, Legislative Director
Marisol Thomer, Outreach Director
Fabiola Carrion, Broadband and Green Jobs Policy Specialist
Cristina Francisco-McGuire, Election Reform Policy Specialist
Tim Judson, Workers' Rights Policy Specialist
Enzo Pastore, Health Care Policy Specialist
Suman Raghunathan, Immigration Policy Specialist
Altaf Rahamatulla, Tax and Budget Policy Specialist
Julie Bero, Outreach and Administrative Specialist
Mike Maiorini, Online Technology Manager
Charles Monaco, Press and New Media Specialist

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

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