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Archive for the ‘MinimumWage’ Category

Trump economic adviser calls federal minimum wage a 'terrible idea'

Monday, November 5th, 2018

Larry Kudlow, one of Donald Trump’s top economic advisers, took some time the week before Election Day to call the federal minimum wage a “terrible idea.” Y’see, when it comes to the cost of living, “Idaho is different than New York. Alabama is different than Nebraska.” No! You don’t say! And in none of those places does working full-time at the current federal minimum wage of $7.25 an hour allow a person to afford rent.

In fact, lots of states and cities have increased their minimum wages. Nebraska voters raised their state’s minimum wage in 2014—it’s now $9. New York’s minimum wage is now $10.40 an hour and slated to go up to $11.10 at the New Year. Idaho and Alabama are at that federal poverty wage of $7.25 an hour, but Republicans in Alabama stepped in to stop Birmingham from raising its minimum wage to $10.10. 

Local control is not what Kudlow is advocating, though:

“I would argue against state and local [increases],” Kudlow said. “But that’s up to the states and localities.”

Big of him, I guess, but if it’s something he’d grudgingly allow rather than something he’s arguing for, then the position that the federal minimum wage is a “terrible idea” boils down to “I don’t like the minimum wage at all and think companies should be able to pay as little as they can get away with.”

This blog was originally published at Daily Kos on November 3, 2018. Reprinted with permission. 

About the Author: Laura Clawson is labor editor at Daily Kos.

Thousands of Amazon Delivery Drivers Won’t Be Eligible for the $15 Wage

Monday, October 15th, 2018

Amazon’s announcement raising its entry-level wage to $15 an hour for all employees has been lauded as an inspiring example of corporate responsibility. In response to sharp criticism and threatened legislation from Sen. Bernie Sanders (I-Vt.) over low pay and horrid conditions at Amazon warehouses, CEO Jeff Bezos said: “We listened to our critics, thought hard about what we wanted to do, and decided we want to lead.”

But thousands of workers delivering your Amazon packages won’t be eligible for that $15 entry-level wage. Across the country, thousands of workers wear Amazon uniforms, use Amazon equipment, and work out of Amazon facilities, but are not classified as Amazon employees. They work for third parties known as delivery service partners (DSPs). It’s just one way Amazon manages the burden of getting billions of packages each year into the hands of its customers.

Amazon has confirmed that these third-party DSPs are not covered by its new wage standard.

Not only will drivers delivering for Amazon be deprived the pay levels of other Amazon employees, but in one notable instance, they were cheated out of wages by a DSP that violated state and federal labor laws.

A federal judge ruled in August that as many as 757 hundred delivery drivers with one DSP on the East Coast were robbed of overtime pay through falsifying time sheet records. The workers have thus far been unable to collect the back pay—potentially millions of dollars— from the DSP or Amazon.

And workers at other Amazon DSPs describe similar practices. So while Amazon basks infavorable PR, it is simultaneously deeply implicated in routine wage theft.

“The face of Amazon.com

Tyhee Hickman of Pennsylvania and Shanay Bolden of Maryland, lead plaintiffs in the U.S. District Court lawsuit, worked for TL Transportation, a Mid-Atlantic regional delivery service. According to the lawsuit, TL literally calls its delivery drivers “the face of Amazon.com,” but those workers are not considered Amazon employees.

Hickman and Bolden’s stories make clear, however, that TL Transportation is merely a pass-through for Amazon. Hickman writes in a sworn statement that he was hired by TL in November 2016, only to report to Amazon’s warehouse in King of Prussia, Penn. for training. The trainer was an Amazon employee. All training materials included Amazon logos. Workers had to purchase and wear Amazon hats, shirts and jackets. Delivery vans had “Amazon” emblazoned on the side, and workers also used an Amazon proprietary device called a “Rabbit” to track routes and scan packages. The Rabbit can also call Amazon customers if they are absent during delivery.

According to Bolden, who worked out of Baltimore, Amazon assigned the routes, and drivers were supposed to call Amazon if they ran into difficulties with deliveries. But despite all this involvement, pay stubs reviewed by In These Times listed the employer as TL Transportation.

“People assume they’re interacting with an employee of a company if they’re wearing the company’s uniform,” says Celine McNicholas, director of labor law and policy at the Economic Policy Institute. “But the web of contracting makes it difficult to discern.”

“Running, running, rushing, rushing”

That TL Transportation subjected employees to wage theft isn’t really in doubt. In a sloppy, misspelled flyer (“WELCOM ABOARD, WE LOOK FORWARD TO WORKING WITH YOU”), employees were told that they would be paid “$160.00 per day based on 8 hrs regular and 2 hours overtime… if you finish early you will be paid of entire day.”
In other words, the time sheet would build in two hours of daily overtime, regardless of hours worked. Pay stubs reflected that. Falsifying time sheets in this manner is definitively illegal, as U.S. District Court Judge Gerald McHugh confirmed in his ruling against TL in August. “Overtime compensation must be specifically linked to the hours an employee actually worked,” McHugh writes.

TL kept to this day rate, with the built-in overtime, regardless of how many days an employee worked. One of Bolden’s pay stubs showed a week where she worked all seven days, with 56 hours at the regular rate and 14 hours of overtime. She should have received 30 overtime hours that week.

In theory, workers could hope to finish deliveries early, earning the $160 day rate for less than 10 hours of work. But that was a pipe dream. Three workers who made sworn declarations and another interviewed by In These Times stated that they always worked more than 10 hours in a day, but were not paid additional overtime.

Hickman stated he would arrive to the Pennsylvania warehouse at 6 a.m. on workdays, attend required meetings with self-identified Amazon personnel, and not leave the warehouse until 9:30. That left him six and half hours to complete his delivery runs of 165 to 200 packages, sometimes as far away as Delaware. If Hickman brought back packages as undeliverable, he was sent back out to re-deliver them, adding more time to the day. Workers also had to inspect delivery vans on exit and re-entry and refuel them at the end of the day. Hickman testified he would usually return to the warehouse at 7:00 p.m., 13 hours after he arrived for work.

A former employee interviewed by In These Times on condition of anonymity, because he has not yet been deposed in the case, described how difficult it was to complete the runs: “It was like running, running, rushing, rushing,” he said. “If you don’t keep going you can’t finish in time.”

To keep up with the demanding schedules, workers were unable to fit in lunch or rest breaks; Hickman testified to having to urinate into bottles or on the side of the road to keep things moving. If workers did miraculously complete routes early, managers sent them back out to “rescue” other delivery drivers, by taking some of their packages. Regardless of the total hours worked in a week, the flat rate never changed.

The job was described as difficult, with rampant turnover. Hickman lasted five months; Bolden lasted seven. The former employee only lasted three. “I lost weight dramatically,” he says. “My wife told me, ‘You look so skinny.’”

The buck stops nowhere

These workers’ stories are broadly consistent with an investigation by Business Insider, which interviewed over 30 drivers with Amazon DSPs. But unlike other DSPs, TL Transportation never had workers sign contracts with a mandatory arbitration agreement, blocking their right to sue. Because it failed to do so, the plaintiffs sought lost and stolen wages in federal court.

Employers steal roughly $8 billion from worker paychecks per year, according to a 2017 studyfrom the Economic Policy Institute. But winning a wage theft ruling through summary judgment without trial, as the TL delivery workers did in August, is exceedingly rare.

Despite the court victory, no worker has yet been paid. TL, which continues to operate, says it lacks the funds to pay above the day rate. Amazon claims it has nothing to do with TL’s labor practices. Plaintiffs continue to battle it outin federal court.

TL’s co-owners Scott Foreman and Herschel Lowe, both named as defendants in the complaint, did not return phone messages asking for comment.

A second lawsuit, against a DSP named NEA Delivery, was filed in August in California, joining prior suits in IllinoisWashington stateand Arizona. But because every DSP is different, plaintiffs’ attorneys must go individually, company by company, to seek restitution for wronged workers. This has the added benefit of preventing Amazon delivery personnel from unionizing across the sector. Amazon has a longstanding policy of not commenting on pending litigation.

“This is nothing unique” among large corporations, said EPI’s McNicholas. “The reason companies do it is that it complicates the worker’s ability to hold their employer accountable.” In Amazon’s case, instead of offering a base wage of $15 an hour and a suite of benefits, it simply hires couriers like TL Transportation at a set rate per delivery and pleads ignorance about violations of labor law. The workers end up stuck, unable to win money owed them from fly-by-night third parties, and unable to challenge the corporate giant whose packages they actually deliver.

EPI’s McNicholas lays blame for the wage theft at the feet of Amazon, for setting up a system of free, rapid shipping. “It’s very difficult for these subcontracting firms to do business if they’re not cutting corners,” she says. “Amazon may say they set loose terms, but they’re instituting the framework that the subcontracting firms have to honor.”

Amazon outsources to hundreds of DSPs and encourages new delivery start-ups, promising that they can get to work within weeks and make up to $300,000 per year. “Logistics experience not required,” the company states on its website. Amazon has also tested several other systems for package delivery, from using the U.S. Postal Service, private competitors like UPS and FedEx, or an Uber-like system called Amazon Flex, where individuals sign up to deliver packages with their own cars.

None of these involve employees of Amazon, and all have come under scrutiny. Postal workers have complained about onerous package loads and weekend deliveries. Labor attorney Shannon Liss-Riordan sued Amazon in 2016 for failing to ensure that Amazon Flex workers earn the minimum wage after accounting for vehicle and maintenance costs, as well as not paying overtime. The case remains pending.

The third-party hustle

Since the $15 wage announcement, Amazon has been criticized for offsetting the pay increase by removing stock awards and bonuses. Others have characterized the wage hike as a way to avoid unionization at Whole Foods, or an impetus to eliminate workers through automation. But the third-party hustle is a far more efficient way to avoid raising wages, while pushing off liability for labor practices to other companies.

The plaintiffs in the TL Transportation case have named Amazon as a defendant, arguing that the company “control[s] the work activities, condition, and management” of the DSPs and their employees. But this bumps up against the “joint employer” standard set by the National Labor Relations Board (NLRB) under Obama, whereby companies are jointly liable for labor law violations by their franchisees, suppliers or contractors if they have indirect influence over the terms of employment.

Trump’s National Labor Relations Board has proposed narrowing the joint employer definition to companies that exercise “substantial, direct and immediate control” over hiring, firing, discipline and supervision. That would still seem to apply to Amazon, but it’s a close call. And courts typically follow the NLRB, which under Trump isn’t exactly worker-friendly.

If the courts agree that Amazon is not a joint employer, it would have a path to keep tens of thousands of delivery workers outsourced and removed from its new wage standards, without sacrificing the significant publicity benefits of the announcement. It’s good work if you can get it.

This article was originally published at In These Times on October 12, 2018. Reprinted with permission. 

About the Author: David Dayen is an investigative fellow with In These Times‘ Leonard C. Goodman Institute for Investigative Reporting. His book Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraudwon the 2015 Studs and Ida Terkel Prize. He lives in Los Angeles, where prior to writing about politics he had a 19-year career as a television producer and editor.

Arkansas’ minimum wage fight will be on the ballot in November

Monday, August 20th, 2018

A proposal to raise Arkansas’ minimum wage to $11 an hour by 2021 gained enough signatures to qualify for the ballot in November. The group gathered over 16,000 more signatures than necessary to make the ballot.

The current minimum wage is $8.50, and the last time Arkansas voters approved of a minimum wage raise was in 2014. The Arkansas minimum wage is not among the lowest state minimum wages in the country and is higher than many of the states that surround it. Kansas and Oklahoma, for example, have a $7.25 minimum wage, the same as the federal minimum wage. Missouri’s minimum wage is $7.85. Still, supporters of the measure — which will be Issue Five on the ballot this year, according to the Associated Press — say that it’s unacceptable for Arkansas to live on only about $18,000 a year.

Stephen Copley, executive director of Faith Voices Arkansas, said in a release to the Arkansas Times, “Today’s minimum wage is about $18,000 a year for someone working full time. With prices going up all the time, you can’t raise a family on that.”

Some economic policy experts say that the federal minimum wage is far too low. According to the Economic Policy Institute, despite productivity roughly doubling since 1968, workers who are paid the federal minimum wage now make 25 percent less than workers making the federal minimum wage that year. As Rajan Menon recently explained in The Nation, over the past decade, the $7.25 federal minimum wage lost almost 10 percent of its purchasing power, thanks to inflation, which means that for someone to make the same as the 2009 minimum wage, they’d have to work 41 additional days.

A 2016 analysis from the White House Council of Economic Advisors that looked at 18 states that raised the minimum wage above $7.25 found that these raises “contributed to substantial increases in average wages for workers in low-wage jobs, helping to reverse a pattern of stagnant or falling real wages” and that “this has occurred without any sign of an impact on employment or hours worked.”

Arkansans for a Fair Wage is leading the effort behind the initiative. David Couch, a lawyer in Little Rock who leads the ballot committee, told the Arkansas Times that the group raised $155,300 and spent $101,000 to pay canvassers to gather signatures. The Fairness Project, a nonprofit founded for the purpose of getting minimum wage increases on the ballot, gave $100,000 in funding to the group and the National Employment Law Project, a nonprofit workers rights group that conducts policy research, gave $500,000. The Fairness Project is also working on a minimum wage initiative in Missouri, and has worked on campaigns for raising the minimum wage in Arizona, Colorado, California, Maine, Washington state and Washington, D.C.

There is also an initiative to get a minimum wage raise on the ballot in Michigan, gradually raising it from $9.25 to $12 in 2022 that is supported by Restaurant Opportunities Centers United (ROC). ROC also supported Initiative 77 in Washington, D.C. to raise the minimum wage for tipped workers. Lily Tomlin and Jane Fonda have come out in support of the wage increase. In July, the board of state canvassers were deadlocked on approval for the ballot proposal. In Missouri, Proposition B is on the ballot, which would raise the state minimum wage from $7.85 to $12 in 2023. Some of the same organizations support this ballot initiative as the one in Arkansas. The National Employment Law Project and the Fairness Project and local officials and mayors, such as St. Louis Mayor Lyda Krewson, have supported it.

This article was originally published at ThinkProgress on August 17, 2018. Reprinted with permission.

About the Author: Casey Quinlan is a policy reporter at ThinkProgress covering economic policy and civil rights issues. Her work has been published in The Establishment, The Atlantic, The Crime Report, and City Limits.

D.C. Council moves to overrule voters, reinstall tipped wage system

Friday, July 13th, 2018

This week, the majority of the D.C. Council supported a repeal of Initiative 77. Initiative 77 is the ballot measure voters approved in June that eliminates the tipped minimum wage and would gradually phase out the tipped workers’ minimum wage, so that by 2026, all workers are paid the same minimum wage.

Fifty-six percent of District voters approved of it. States such as California, Alaska, Washington, and Oregon, have gotten rid of the subminimum wage, and Economic Policy Institute’s analysis shows that poverty rates for servers and bartenders are lower in the states that have.

The campaign against Initiative 77 was well-funded and backed by the Restaurant Association of Metropolitan Washington (RAMW), which created a committee, “Save Our Tip System Initiative 77” to spread anti-Initiative 77 messages. According to The Intercept, the committee is managed partly by Lincoln Strategy Group, which did canvassing work for the Trump campaign. The National Restaurant Association, which has been lobbying against the tipped minimum wage for decades, gave the campaign $25,000.

The council members who have supported a repeal include Jack Evans (D), Anita Bonds (D), Trayon White (D), Kenyan McDuffie (D), Brandon Todd (D), Vincent Gray (D), and D.C. Council Chairman Phil Mendelson (D). Brianne Nadeau (D) tweeted that although she did not support the ballot measure, voters did, which is why she didn’t back the repeal.

Council member Todd tweeted that “This bill is just the beginning of a legislative process where nuanced deliberation & constructive dialogue can take place.” When asked by Washington Post reporter Fenit Nirappil how a bill flatly repealing it would lead to nuanced deliberations, Todd responded that “it initiates public hearings. Who knows how the bill will change as testimony and more information become available.”

The Council won’t take up the bill until after summer recess. Council members chose not to announce the bill to repeal during a committee meeting and instead filed it with the Council’s Office of the Secretary.

Diana Ramirez of the Restaurant Opportunities Center DC told WAMU, “These are the same constituents who just voted them into office and re-elected them. I think they deserve to tell us why they introduced this.”

Although Ramirez has voiced a willingness to work with council members on some kind of compromise legislation, according to the Washington Post, Council member Mendelson said, “There are not a lot of compromise ideas that come to mind.”

The council has only overridden ballot initiatives four times since the 1980s, according to the Washington Post.

There have been many recent incidents of local lawmakers trying to override ballot measures. In Nebraska, Republican lawmakers filed a lawsuit to prevent voters from putting Medicaid expansion on the ballot this November. In other states, such as Maine and South Dakota, lawmakers have blocked or repealed ballot measures.

Josh Altic, project director for the Ballot Measures Project for the website Ballotpedia, told Stateline, a nonpartisan news service, “We have definitely seen some notable cases of legislative tampering this year, especially with regard to the boldness with which legislatures are willing to change or repeal initiatives.”

This article was originally published at ThinkProgress on July 11, 2018. Reprinted with permission.

About the Author: Casey Quinlan is a policy reporter at ThinkProgress covering economic policy and civil rights issues. Her work has been published in The Establishment, The Atlantic, The Crime Report, and City Limits.

Minimum wage workers just got a raise in two states, D.C., and 15 cities or counties

Thursday, July 5th, 2018

Minimum wage workers in two states, Washington, DC, and 15 cities and counties got a raise on Sunday. These state and local governments had passed laws to increase the minimum wage on a schedule, with July 1 and January 1 being the most common dates for raises.

  • Oregon doesn’t have a single statewide minimum wage, but it went up! The minimum is now $10.75 as a standard, $10.50 in “nonurban” counties, and $12 in the Portland metro area.
  • Maryland’s minimum wage went up to $10.10. In Maryland, Montgomery County boosted its minimum wage from $11.50 to $12.25
  • Washington, D.C., rose from $12.50 to $13.25.
  • Eleven California cities saw minimum wage increases, with Emeryville the high point at $15.69 an hour for larger businesses. Los Angeles, Los Angeles County, Malibu, Milpitas, Pasadena, and Santa Monica all went from $12 to $13.25. San Francisco rose from $14 to $15.
  • Workers in Portland, Maine, are seeing a modest bump from $10.68 to $10.90.
  • In Illinois, Chicago went from $11 to $12 and Cook County went from $10 to $11.

The federal minimum wage remains stuck at $7.25 an hour, with Republicans continuing to refuse to consider an increase. Perhaps most depressingly—and showing most clearly where Republican priorities are—Birmingham, Alabama, and Johnson County, Iowa, were both supposed to have minimum wage increases on July 1, but didn’t. Their state legislatures stepped in to pre-empt local governments from improving life for workers.

About the Author: Laura Clawson is labor editor at DailyKos.

This blog was originally published at DailyKos on July 4, 2018. Reprinted with permission.

What You Need to Know About Washington, D.C.'s Initiative 77 and the Minimum Wage

Wednesday, June 20th, 2018

On Tuesday, Washington, D.C., voters will have an opportunity to vote on Initiative 77, a ballot measure supported by a wide array of progressive and labor organizations that would eliminate the subminimum wage for tipped workers and give many working families a much-needed raise.

Initiative 77 would increase the tipped minimum wage to match the full wage: If it passes, the initiative would phase out the tipped minimum wage, leaving a flat $15 per hour minimum wage for D.C. workers. This would be phased in between now and 2025, giving restaurant and bar owners more than enough time to adjust to the change.

Tipped workers aren’t limited to restaurants and bars: Many other workers get tips, too, including manicurists/pedicurists, hairdressers, shampooers, valets, taxi and rideshare drivers, massage therapists, baggage porters and others. Very few of them get anywhere near the 20% standard you see in high-end restaurants and bars.

The current law is changing, but it will still leave tipped workers behind: The current minimum wage in D.C. is $12.50 an hour, with a minimum wage of $3.33 for tipped workers. If tipped workers don’t earn enough from tips to get to $12.50, employers are supposed to pay the difference. After existing minimum wage increases are fully implemented, the full minimum wage for D.C. will be $15 an hour, while the tipped minimum will increase to $5. The cost of living in D.C. is higher than every state in the United States except Hawaii.

D.C. has a particular problem with the minimum wage: As one of the places in the United States with the highest costs of living, low-wage workers are hit harder by discriminatory laws. D.C. has the largest gap in the country between its tipped minimum wage and its prevailing minimum wage. Tipped workers in D.C. are twice as likely to live in poverty as the city’s overall workforce. Tipped workers in D.C. are forced to use public assistance at a higher rate than the overall population, with 14% using food stamps and 23% using Medicaid.

Wherever tipped wage jobs exist, they are typically low-wage, low-quality jobs: Nationally, the median wage is $16.48 and tipped workers median wage is $10.22. Nationally, 46% of tipped workers receive public assistance, whereas non-tipped workers use public assistance at a rate of 35.5%. Workers at tipped jobs are less likely to have access to paid sick leave, paid holiday leave, paid vacations, health insurance and retirement benefits. Seven of the 10 lowest-paying job categories are in food services, according to the U.S. Bureau of Labor Statistics.

Tipped workers are more likely to end up in poverty: In states where the tipped minimum wage is at the federal standard of $2.13, the lowest in the country, the poverty rate for all workers is 14.5%, which breaks down to 18% for waitstaff and bartenders and 7% for non-tipped employees. What day of the week it is, bad weather, a sluggish economy, the changing of the seasons and any number of other factors completely outside of a server’s control can influence tips and make a night, a week or a season less likely to generate needed income.

The predictions of doom and gloom about raising the minimum wage or the tipped minimum wage never come true: Eight states already have eliminated the tipped wage and the restaurants in those states have higher sales per capita, higher job growth, higher job growth for tipped workers and higher rates of tipping. In fact, states without a lower tipped minimum wage have actually seen sectors where tipping is common grow stronger than in states where there is a subminimum wage. This is consistent with the data from overseas where countries have eliminated tipping and subminimum tipped wages. In states without a subminimum tipped wage, tipped workers, across the board, earn 14% higher. Increased minimum wages lead to employers seeing a reduction in turnover and increases in productivity. And, while there are certainly some exceptions, tippers in states without subminimum wage don’t tip less.

Tipped workers are more likely to be women, making lives worse for them and their families: Of the 4.3 million tipped workers in the United States, 60% of them are waiters and bartenders. Of that 2.5 million, 69% of them are women. Furthermore, 24% are parents, and 16% of them are single mothers. Half of the population of tipped bartenders and waitstaff are members of families that earn less than $40,000. Increasing the tipped minimum wage lets parents work fewer nights and have more time at home with their families. It also helps provide for a more steady, predictable income. Since 66% of tipped workers are women, a lower tipped minimum wage essentially creates legalized gender inequity in the industry. These lowest-paid occupations are majority female. More than one in four female restaurant servers or bartenders in D.C. live in poverty, twice the rate of men in the same jobs.

Harassment and objectification are encouraged by the tipped system: The stories about harassment in the restaurant industry are legion. Servers are forced to tolerate inappropriate behavior from customers in order to not see an instant decrease in income. This forces them to subject themselves to objectification and harassment. Workers in states with a subminimum tipped wage are twice as likely to experience sexual harassment in the workplace. In D.C., more than  90% of restaurant workers report some form of sexual harassment on the job. Women’s tips increase if they have blond hair, a larger breast size and a smaller body size, leading to discrimination against women that don’t have those qualities. Nearly 37% of sexual harassment charges filed by women to the EEOC come from the restaurant industry. This rate is five times higher than the overall female workforce. LGBTQ serversalso face a higher rate of harassment in order to obtain tips. Sexual harassment of transgender employees and men is also high in tipped environments. Some 60% of transgender workers reported scary or unwanted sexual behavior. More than 45% of male workers reported that sexual harassment was part of their work life, as well.

The subminimum tipped wage harms people of color: Research shows that tipping has racist impacts, too. Nonwhite restaurant workers take home 56% less than their white colleagues. Research shows that if the minimum wage had held the value it had in 1968, poverty rates for black and Hispanic Americans would be 20% lower. While many restaurants and bars claim to be race-neutral in hiring, the evidence shows that race often has an impact on who gets hired for jobs that directly interact with customers. And fine-dining environments, the ones where servers and bartenders make the most in tips, are much more likely to hire white servers and bartenders, particularly white males. Also, customers, generally speaking, tip black servers less than white servers. For instance, black servers get 15-25% smaller tips, on average in D.C.

The people behind the opposition to 77 are not worker- or democracy-friendly: Public disclosures show that the Save Our Tips campaign that opposes Initiative 77 is heavily funded by the National Restaurant Assocation. This particular NRA represents the interests of, and is funded by, big corporations, such as McDonald’s, Yum! (which owns Taco Bell, Pizza Hut & KFC), Burger King, Darden Restaurants (which owns Olive Garden, Red Lobster and others) and more. The group spends as much as $98 million to oppose minimum wage increases, safety and labor requirements and benefit increases and requirements. Meanwhile, the CEO of the NRA, Dawn Sweeney, took home $3.8 million in total compensation.

The Save Our Tips campaign is managed in part by Lincoln Strategy Group. In 2016, the group did $600,000 worth of work for the Donald Trump presidential campaign. Lincoln Strategy is managed by Nathan Sproul, a Republican consultant and former executive director of the Arizona Christian Coalition. Sproul has a history of being accused of fraudulent election-related activities, including destroying Democratic voter registration forms and creating a fake grassroots effort to undermine the Consumer Financial Protection Bureau.

Another corporate-sponsored group, the Employment Policy Institute, has come out strongly against the initiative and created a website to attack it and ROC. The Institute is the creation of Rick Berman, a wealthy corporate lobbyist who runs campaigns against public interest groups like the Humane Society and labor unions.

Up until 1996, the tipped subminimum wage had been tied into being 50% of the prevailing minimum wage. That year, legislation decoupled the two and the subminimum wage for tipped jobs has stayed at $2.13 nationally, while some states have raised it. The NRA, headed up then by former Godfather’s Pizza CEO Herman Cain, who would go on to run for president, led the charge to separate the two minimum wages.

The separate tipped minimum wage is a burden on employers and invites misuse: The system of tracking tips and wages so that employers can make up the difference is a complex one that is burdensome for employers. The system requires extensive tracking and accounting of tip flows. Not only this, employers are allowed to average tips over the course of a workweek and only have to pay the difference if the average is less than the minimum wage. Tips can also be pooled among various types of restaurant employees. Tip stealing and wage theft are hard to prove and workers are often reluctant to report them out of fear that they will be given fewer shifts or fired.

Employers frequently fail to pay the balance to their employees: While the law requires to make up the balance when tipped wages don’t reach the full minimum wage, employers often fail to do so. The Department of Labor investigated more than 9,000 restaurants and found that 84% had violated this law and had to pay out nearly $5.5 million in back pay because of tipping violations. How many didn’t get caught?

Restaurants are using union-avoidance tactics to sway employees against the initiative: Numerous reports from workers at D.C. restaurants have made it clear that not only are employers singing on to public letters and posting signs against Initiative 77, they are trying to sway their employees, too. Tactics that have been reported are straight from the union-advoidance industry. Many employers are forcing employees to listen to their opinion on the measure. Others have instructed them to evangelize to customers. Some are sending instructions to their employees on how to volunteer at the polls against the Initiative. Others have shared explicitly political videos with employees. Some managers have gone as far as to speak negatively about community organizations advocating for Initiative 77.

This blog was originally published at AFL-CIO on June 18, 2018. Reprinted with permission.

D.C. servers and bartenders say the tipped wage system isn’t working for them

Thursday, June 14th, 2018

A ballot measure in Washington, D.C. that would raise the minimum wage for tipped workers has been at the center of a heated debate in the restaurant industry.

Tipped workers in the city currently receive a base wage of just $3.33 an hour. On June 19, D.C. voters will vote on whether to change that. Initiative 77 would raise those workers’ minimum wage gradually, so that it matches the city’s minimum wage by 2026.

Bartenders and servers who spoke to ThinkProgress said they support the ballot measure because they want to have a more consistent income and feel less susceptible to putting up with harassment. But there’s a lot of misinformation out there.

The heated debate over Initiative 77

Over the last few months, “Save Our Tips” signs have been spotted inside restaurants and in windows throughout the city due to the opposition from many employers in the restaurant industry.

Last year, the Restaurant Association of Metropolitan Washington (RAMW) created a committee called “Save Our Tip System Initiative 77” to campaign against and spend money on legal challenges against the initiative. The committee is managed in part by the Lincoln Strategy Group, which was responsible for canvassing work for Trump’s presidential campaign, according to The Intercept. The campaign has also received donations from many restaurant groups, including the National Restaurant Association, which successfully lobbied against increasing the minimum wage for tipped workers in the 1990s. The group gave the campaign $25,000 of the $58,550 it has raised so far, The Intercept reported.

“Servers are compensated very well,” Kathy Hollinger, the president of the Restaurant Association of Metropolitan Washington, told WAMU last year. “They make far more than minimum wage because of the total compensation structure that works for a server.”

Most of the servers and bartenders ThinkProgress spoke to said employers oppose Initiative 77 and made their views known. Some employers have even gone so far as to advocate against the ballot measure in discussions with servers and to ask them to tell customers about the measure.

On the other side of the debate are the D.C. branch of Restaurant Opportunities Center United (ROC) — which is in charge of the national One Fair Wage Campaign to get rid of the tipped wage system — and many workers who the ballot initiative actually affects.

Although under law, tipped workers are supposed to receive the minimum wage, they say enforcement is another issue entirely. (Workers spoke to ThinkProgress on the condition that we do not publish their real names, out of fear of retaliation from their employers.)

Jamie, who works at a midsize restaurant in Petworth said, “Theoretically, we already have that level playing field, because restaurants are obligated to make up the difference if wage and tips doesn’t come out to minimum wage for workers, but most restaurants are non-compliant and don’t explain this policy to workers.”

Melissa, who works as a server at a restaurant on U Street, said it’s about making things more consistent and enforceable.

“I just think everyone should have that security of knowing they are going to have that paycheck that is going to equal at least a certain amount and it’s a lot more easy to enforce,” she said. “We’ll have tips on top of that and the service as we know it isn’t going to change.”

Michelle, who works as a bartender, said there are Save Our Tips signs on the walls and windows of the restaurant she works at. The restaurant group that owns the restaurant she works for, sends a weekly newsletter to employees, which provides links to instructions on how to volunteer at polls and anti-Initiative 77 videos.

She has heard from servers that they are encouraged to talk to customers about it and “make sure they know the server are against it and that it affects their livelihood and that they should vote against it.”  

Jamie said their employer posted signs that read “NO on 77” and encouraged workers to vote against it. “My managers have also made a point to speak negatively of community organizations that advocate for [Initiative] 77,” they said.

Melissa said she doesn’t have a problem with restaurant owners making their views known as long as they aren’t “lecturing workers on company time” about the ballot measure or spreading misinformation.

“This Save Our Tips campaign has so much fear mongering and misinformation. People believe so many inaccurate ideas because their bosses have said, ‘This is what’s going on,’” she said. “I just think they should have the correct information. I don’t think that’s happening right now.”

Melissa said she thinks workers are being misled when they’re told by employers that people will go eat in Virginia or Maryland instead or that restaurants will close, when in reality, the ballot measure allows the change to take effect gradually. She said some people have told her that they believe ROC is a union and that they will have to pay union dues.

“It’s just a shame they’re being given so many reasons to be afraid,” she said.

NAJ said a lot of people who support the ballot measure are afraid to say anything at their workplace for fear of retaliation.

“Some of those employees are doing so by choice, either because they’re against it or don’t understand it,” they said. “A lot of them can’t come out in support of it because they could lose their livelihoods. They could lose their jobs.”

Many places have already gotten rid of the subminimum wage for tipped workers, including California, Minnesota, Hawaii, Montana, Oregon, Alaska, Washington, and Nevada, and a number of cities. According to the Economic Policy Institute, poverty rates for servers and bartenders are much lower in states that don’t allow a subminimum wage.

Michelle moved to D.C. from California, where they got rid of the subminimum wage, and said she shares her experience working in California with other tipped workers.

“The differences have been pretty striking to me in terms of take-home money, the consistency of a paycheck or the consistency of what I make in a week to two weeks, and also the overtime that is expected of you in a non-tipped wage state,” she said. “I’ve really noticed the difference.”

Michelle said she has asked coworkers who wear No on 77 buttons to tell her more about their opposition to the ballot initiative.

“They’re like, ‘I don’t want to lose my tips’ and I’m like, ‘Oh is that what you believe is going to happen?’ and they say yes. I ask where they’re getting their information from. The only source they have is management and coworkers,” she said. “But they seem to be responsive when I tell them how it was for me when I worked in California and I had a regular paycheck. It wasn’t paying much but at least I could depend on the paycheck every couple weeks that I knew was coming and it was a consistent income as opposed to one week making a difference of $200 to $300 dollars a week depending on tips.”

Workers in support of Initiative 77 say the most privileged voices are the loudest

Servers and bartenders ThinkProgress spoke to said that although some tipped workers who oppose Initiative 77 seem uninformed, others appeared to oppose it because they benefit the most from the current system.

“Most of the white male bartenders I work with are very strongly anti-77,” Michelle said. “Mostly men and white guys are becoming voice of No on Initiative 77 and they are the loudest voice speaking for tipped workers. They aren’t my voice. And the people of color I know in the industry, they are not their voice either.”

NAJ said they don’t see enough people from marginalized groups represented in the debate in the media over Initiative 77.

“The idea that the experience of highest-tier people making the most money should be the representative experience is insulting to people who work in these positions who, for whatever reason, could not move into field of choice because of marginalized identities or whatever it is,” they said. “They are having their livelihoods affected by policies and by business models that literally privilege already privileged people.”

Melissa said people’s opinions seem to be divided along class lines, with people who make more money in the industry opposing the initiative, whereas people who suffer more from wage theft, make lower tips, and work several jobs tend to support it.

“They’re the ones being hurt by the current system,” she said.

Sexual harassment, queerphobia, and racism also needs to be part of the discussion on Initiative 77, servers and bartenders say.

ThinkProgress spoke to queer tipped workers, tipped workers of color, and tipped workers who have experienced sexual harassment. Although servers acknowledge that Initiative 77 won’t eliminate discrimination and sexual harassment from customers, they won’t be as worried about customer biases and behaviors affecting their ability to pay rent or buy groceries — or their ability to push back against harassment.

“I have been kissed by customers against my will. I have been groped. I have had my ass grabbed while I was pouring wine for a table,” Melissa said. “I have had so much inappropriate behavior that I was expected to put up with both by customers and by management because hey, it was a slow night and I needed the money so I guess I’m going to let you grope me if you’re going to tip me.”

Melissa said that even with tables she feels more comfortable talking to, she worries about outing herself as queer because she doesn’t know how her customers will feel.

“I have friends who present queer, much more than I do, who have faced discrimination from customers. I don’t want that to happen to me,” she said.

“White men consistently get tipped better than people of other races and genders — I don’t just mean statistically, but I mean that my own experiences have shown this to be the case,” Jamie said.

Michelle said, “As a bartender you’re likely to let a lot more stuff slide that you would otherwise call people out on when you know you’re not as dependent on tips.”

NAJ, who identifies as a Black femme, said, “I most certainly won’t be tipped by a homophobe or someone who is racist. Disabled workers experience this and transgender servers and bartenders experience this.”

“One of the arguments against 77 is that it will affect highest tipped workers in the business,” they added. “Many of them are from privileged groups, usually white men, usually straight appearing, and conventionally attractive and so they’re able to exploit a system that oppresses a certain class in order to make what they consider to be a fair wage. But a black trans woman working at IHOP can’t make anywhere near that.”

This article was originally published at ThinkProgress on June 12, 2018. Reprinted with permission. 

About the Author: Casey Quinlan is a policy reporter at ThinkProgress covering economic policy and civil rights issues. Her work has been published in The Establishment, The Atlantic, The Crime Report, and City Limits.

Busting some myths about tipped workers and the minimum wage

Wednesday, June 6th, 2018

There’s a referendum in Washington, D.C., to end the tipped minimum wage and make sure tipped workers get the full minimum wage. Restaurant groups are fighting hard and spreading misinformation, so the Economic Policy Institute sets the record straight. A lower wage for tipped workers disproportionately affects women and people of color—it “perpetuates racial and gender inequities, and results in worse economic outcomes for tipped workers,” especially given research showing that white people get higher tips.

Tipped workers in states where they get a subminimum wage experience higher poverty levels than in equal treatment states—a difference of 18.5 percent poverty vs. 11.1 percent poverty. And while restaurant owners are threatening that if the tipped minimum wage goes up, tips will go down or go away:

The data show that tipped workers’ median hourly pay (counting both base wages and tips) is significantly higher in equal treatment states. Waiters, waitresses, and bartenders in these states earn 17 percent more per hour (including both tips and base pay) than their counterparts in states where tipped workers receive the federal tipped minimum wage of $2.13 per hour. There is no evidence that net hourly earnings go down, such as from customers tipping less, when tipped workers are paid the regular minimum wage.

Finally, giving tipped workers the full minimum wage is not going to devastate the restaurant industry:

The restaurant industry thrives in equal treatment states. In one of the most comprehensive studies on the minimum wage, researchers aggregated the results of over four decades of studies on the employment effects of the minimum wage. They concluded that there is “little or no significant impact of minimum wage increases on employment.” Affected businesses are typically able to absorb additional labor costs through increases in productivity, reductions in turnover costs, compressing internal wage ladders, and modest price increases. Furthermore, research specific to the tipped minimum wage also found no significant effect on employment.

This blog was originally published at Daily Kos on June 2, 2018. Reprinted with permission.

About the Author: Laura Clawson is labor editor at DailyKos.

New study reveals just how little Uber drivers make

Tuesday, March 6th, 2018

2017 was a rough year for Uber. The ride-sharing giant was embroiled in a sexual harassment scandalIts CEO resigned. It admitted to underpaying its drivers in New York City, was fined $20 million for making false promises to its drivers, and was banned from one of its biggest overseas markets.

In response, the company has found itself in nearly full-time damage control mode and scrambling to win some positive publicity. Its latest community-orientated offering is the promising Uber Health, which allows medical facilities to book Uber rides for patients who don’t have access to reliable transportation. The program does not require the patient to have access to the Uber app or even a smartphone, according to TechCrunch.

Tips Are More Important Than You Think

Monday, January 22nd, 2018

The Donald Trump Labor Department is proposing a rule change that would mean that restaurant servers and bartenders could lose a large portion of their earnings. The rule would overturn one put in place by the Barack Obama administration initiated, which prevents workers in tipped industries from having their tips taken by their employers. Under the new rule, business owners could pay their wait staff and bartenders as little as $7.25 per hour and keep all tips above that amount without having to tell customers what happened.

new study from the Restaurant Opportunities Centers United and the National Employment Law Project shows that waiters and bartenders earn more in tips than they do from their base hourly wage. The median share of hourly earnings they make from tips makes up nearly 59% of waitstaff earnings and 54% of bartenders’ earnings. Allowing employers to take much or all of that tipped income would be a major blow to many working in the restaurant and bar industry.

Workers in these fields are already poorly compensated. A recent study by the Economic Policy Institute and the University of California, Berkeley, found that “median hourly earnings for waiters and bartenders are a meager $10.11 per hour, including tips. That is just $2.86 above the current federal wage floor and far below what workers throughout the country need to make ends meet.”

While proponents of the change suggest that businesses might use the tips to give workers more hours or to subsidize non-tipped employees, but with no requirement for such use of the tipped wages, employers could use them in any way they see fit. EPI analysis found that the new rule would transfer $5.8 billion from workers to employers.

Read the full report.

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