Friday, May 2, 2014

Not All $10.10s Are Created Equal

Wednesday, Senate Republicans blocked the cloture vote on the Minimum Wage Fairness Act, which would have raised the minimum wage to $10.10 by the end of 2016.

Senate Democrats may continue to stage votes on this, but the bill will not likely pass in this Congress. Several states have, however, been raising the minimum wage themselves. Most of the states that have passed minimum wage increases already adopted the same number as the Senate Democrats and the president: $10.10. However, not all $10.10s are created equal. Although superficially the same, the bills that have passed so far in Hawaii, Maryland, and Connecticut (listed in reverse chronological order) are all weaker (with regard to the non-tipped wage) than the bill proposed on the federal level. This occurs because of carve-outs and slowed implementation processes.

Below, I want to look at the Senate bill in contrast to these three bills. I will only be looking at the non-tipped wage ($10.10) and any carveouts. Minnesota also passed a minimum wage increase, but despite having a Democratic governor and two Democratic houses in the legislature, Minnesota only sought to raise the minimum wage to $9.50, and with many carveouts at that. Massachusetts is currently considering legislation, but the House and the Senate (both overwhelmingly Democratic) differ on the details. Both, however, are proposing to raise the minimum wage to beyond $10.10.
Let's refresh our memory about the Senate bill, the one just voted on yesterday.

The Minimum Wage Fairness Act raises the minimum wage from $7.25 to $10.10 in three steps:
(A)$8.20 an hour, beginning on the first day of the sixth month that begins after the date of enactment of the Minimum Wage Fairness Act ;
(B)$9.15 an hour, beginning 1 year after that first day;
(C)$10.10 an hour, beginning 2 years after that first day;
The Senate bill's implementation process is 2.5 years. The full $10.10 would not be seen until late 2016 had it passed. 

Hawaii, as you may have read, just passed a minimum wage increase. In most reporting, the $10.10 will stand out. You may think that they are the same. But if you read closer, they're not.

The Hawaii bill has four steps:
$7.75 per hour beginning January 1, 2015; $8.50 per hour beginning January 1, 2016;
$9.25 per hour beginning January 1, 2017; and
$10.10 per hour beginning January 1, 2018.
When you hear that Hawaii raised the minimum wage to $10.10, remember that the $10.10 doesn’t take full effect until January 2018.
And for reference, here are the living wage standards for a single adult in Hawaii:

Hawaii County: $10.16
Honolulu County: $12.91
Kalawao County: $11.37
Kauai County: $11.08
Maui County: $13.02

The Hawaii Senate has 24 Democrats and 1 Republican. The Hawaii State House has 43 Democrats and 7 Republicans.


Maryland passed a minimum wage increase just under a month ago. The Maryland bill takes even longer than the Hawaii one to reach full implementation. $10.10 will not become the minimum wage in Maryland until July 2018.
(1)    For the 6-month period beginning January 1, 2015, $8.00 per hour (2)    For the 12-month period beginning July 1, 2015, $8.25 per hour
(3)    For the 12-month period beginning July 1, 2016, $8.75 per hour
(4)    For the 12-month period beginning July 1, 2017, $9.25 per hour
(5)    Beginning July 1, 2018, $10.10 per hour
The Maryland bill also allows businesses to pay teenagers sub-minimum wages for their first six months of employment:
(D)(1)(I) Except as provided in Paragraph (2) of this subsection and subject to subparagraph (II) of this paragraph, an employer may pay an employee a wage that equals 85% of the state minimum wage established under this section if the employee is under the age of 20 years. ---(II) An employer may pay to an employee the wage provided under subparagraph (I) of this paragraph only for the first 6 months that the employee is employed.
--(2)(I) This paragraph applies only to an employer that is an amusement or a recreational establishment, including a swimming pool, if the employer:
------1. Operates for no more than 7 months in a calendar year; or
------2. For any 6 months during the preceding calendar year, the average receipts that do not exceed one-third of the average receipts for the other 6 months.
---(II) An employer may pay an employee a wage that equals the greater of:
------1. 85% of the state minimum wage established under this section; or
-----2. $7.25
The Maryland bill has even more carve-outs. It does not apply to an individual who
(1)    Is employed in a capacity that the Commissioner defines, by regulation, to be administrative, executive or professional; (2)    Is employed in a nonadministrative capacity at an organized camp, including a resident or day camp;
(3)    Is under the age of 16 years and is employed no more than 20 hours in a week;
(4)    Is employed as an outside salesman;
(5)    Is compensated on a commission basis;
(6)    Is a child, parent, spouse, or other member of the immediate family of the employer;
(7)    Is employed in a drive-in theater;
(8)    Is employed as part of the training in a special education program for emotionally, mentally, or physically handicapped students under a public school system;
(9)    Is employed by an employer who is engagd in canning, freezing, packing, or first processing of perishable or seasonal fruits, vegetables, or horticultural commodities, poultry, or seafood
(10)    Engages in the activities of a charitable, educational, not for profit, or religious organization if (i) the service is provided gratuitously; and (ii) there is, in fact, no employer-employee relationship
(11)    Is employed in a cafĂ©, drive-in, drugstore, restaurant, tavern, or other similar establishment that: (i) sells food and drink for consumption on the premises; and (ii) has an annual gross income of $400,000 or less;
(12)    Is employed in agriculture if, during each quarter of the preceding calendar year, the employer used no more than 500 agricultural-worker days;
(13)    Is engaged principally in the range production of livestock;
(14)    Is employed as a hand-harvest laborer and is paid on a piece-rate basis in an operation that, in the region of employment, has been and customarily and generally is recognized as having been paid on that basis if
(i)    the individual:
1.    Commutes daily from the permanent residence of the individual to the farm where the individual is employed; and
2.    During the preceding calendar year, was employed in agriculture less than 13 weeks; or
(ii)    the individual:
1.    Is under the age of 17;
2.    Is employed on the same farm as a parent of the individual or a person standing in the place of the parent; and
3.    Is paid at the same rate that an employee who is at least 17 years old is paid on the same farm
In the five DC suburb counties (Calvert, Charles, Frederick, Montgomery, Prince George), the living wage standard is $13.20 for a single adult. 
For the Baltimore metro area (Baltimore City, Anne Arundel, Baltimore County, Carroll County, Harford County, Howard County, and Queen Anne's County), the living wage standard is $11.24 for a single adult.

The Maryland Senate has 35 Democrats and 12 Republicans. The House of Delegates has 97 Democrats and 43 Republicans.


Connecticut passed a minimum wage increase back in late March. As of January 2014, the minimum wage in Connecticut was $8.75. The new bill raises it to $10.10 by January 2017 in three steps:
…effective January 1, 2015, not less than nine dollars and fifteen cents per hour, and effective January 1, 2016, not less than nine dollars and sixty cents per hour,
and effective January 1, 2017, not less than ten dollars and ten cents per hour or one-half of one per cent rounded to the nearest whole cent more than the highest federal minimum wage, whichever is greater, except as may otherwise be established in accordance with the provisions of this part.
The Connecticut bill also allows employers to pay teenagers or trainees sub-minimum wages:
The rates for learners, beginners, and persons under the age of eighteen years shall be not less than eighty-five per cent of the minimum fair wage for the first two hundred hours of such employment and equal to the minimum fair wage thereafter, except institutional training programs specifically exempted by the commissioner.
So, again, whenever you hear that Connecticut raised its minimum wage to $10.10, remember that that wage increase isn't fully effective until January 2017. 

Here are the living wage standards for a single adult in Connecticut:

Fairfield County: $12.07
Hartford County: $10.08
Litchfield County: $9.49
Middlesex County: $10.36
New Haven County: $10.57
New London County: $10.02
Tolland County: $10.08
Windham County: $9.11

The Connecticut Senate has 22 Democrats and 14 Republicans. The Connecticut General Assembly has 98 Democrats and 53 Republicans.

In Conclusion

These are all deep blue states with unobstructed majorities in both houses and Democratic governors. One would think (hope) that the Democrats there would push for bolder legislation than Democrats in Congress. One would also be wrong.

No comments:

Post a Comment