Tuesday, April 8, 2014

Maryland and Minnesota Democrats Undercut the National Party on the Minimum Wage

Yesterday, the Maryland Senate passed legislation to increase the minimum wage, which the Assembly had already passed last year. Governor Martin O'Malley will soon sign it.

The New York Times framed this as "pressing Obama's Agenda".
Maryland embraced President Obama’s call to raise the minimum wage to $10.10 an hour on Monday, the second state to do since Connecticut acted last month.
The Maryland General Assembly voted for the pay raise on the last day of its 2014 regular session, giving Gov. Martin O’Malley a victory on his top priority this year. The governor, in his last year in office, has staked out a consistently liberal record as he weighs running for the 2016 Democratic presidential nomination.
But is it the same agenda? If you look at the bills, the answer is a clear NO. If anything, Maryland is undercutting Obama and national Democrats. 
The plan being pushed by Congressional Democrats (with the backing of the president) has three parts:
(1) Raising the minimum wage from $7.25 to $10.10 in three steps: $8.20 three months after passage, $9.15 one year to the day thereafter, and $10.10 1 year to the day thereafter

(2) Indexing the minimum wage so that it rises with inflation starting the following year
(3) Raising the tipped wage to 70% of the minimum wage in a series of gradual steps (to $3.000 1 year and 90 days after passage and $0.95 each year thereafter until this proportion is achieved)
(This isn't an exact quote--nor is that below, but I found blocking the text to make it easier to read.) Now, what are the parts to the Maryland legislation?
(1) Raising the minimum wage from $7.25 to $10.10 in five steps: $8.00 in January 2015, $8.25 in July 2015, $8.75 in July 2016, $9.25 in July 2017, and $10.10 in July 2018.
(2) No indexing
(3) Freezing the tipped wage at $3.63 an hour
(4)  Allowing employers to pay employees who are 19 or younger 85% of the minimum wage for the first six months of employment
(5) Exempting some businesses, including restaurants with income below $400,000
The Maryland Senate has 35 Democrats and 12 Republicans. The House of Delegates has 97 Democrats and 43 Republicans. The governor is a Democrat. 
Look at those bills side-by-side. Is the Maryland bill "pressing" or "advancing" the agenda put forth by Congressional Democrats backed by Obama? No, it is clearly not. It is stupidly and cruelly undercutting it by weakening the demands in the state right next door to DC of all places.

Minnesota Democrats are also undercutting national Democrats, as we can see from the same New York Times article (although it does not frame the situation as such). The Democrats of the Minnesota State Legislature reached a deal yesterday to raise the minimum wage for large employers to $9.50 an hour by 2016 from its current $6.15. Their goal wage is lower than the national goal even though both houses of the Minnesota legislature and governorship are all under Democratic control (39 to 28 in the Senate, 73 to 61 in the House).

Here are the details of that deal:
For large businesses with gross sales over $500,000, the minimum wage would rise to $8 in 2014, $8.50 in 2015 and $9.50 by 2016.
For small businesses with gross sales below $500,000, the minimum wage would rise to $6.50 in 2014, $7.25 in 2015 and $7.75 by 2016.
Starting in 2018, the wage would go up with inflation, capped at 2.5 percent.
Minnesota apparently allows businesses (large ones currently, small ones now and into the future) to pay their employees below minimum wage. Is that even legal? 
Although the bill includes indexing, it allows the Department of Labor and Industry to block such increases in the time of an economic downturn. The Minnesota Democrats must have forgotten that preventing the collapse of wages in the time of a downturn is one of the basic reasons for having a minimum wage in the first place.

Anyway, that bill, too, undercuts the efforts of national Democrats. Your Mark Pryor-Democrats or Susan Collins-Republicans can point to Minnesota as an example of a "compromise" legislation and weaken the bill.

If you want to get $10.10 on the national level, the blue states should be pushing for more, not less.

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