House Revenue Panel Votes to Keep Workers in Poverty

House Revenue Panel Votes to Keep Workers in Poverty

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After hearing corporate flack after corporate flack testify that a raise in the state minimum wage would kill their businesses and rob them of their chance to give young people jobs, the House Revenue Committee voted 8-1 to kill a proposed state minimum wage hike.

While it was no surprise, given the historic anti-worker attitude of the Wyoming Legislature, it was still an unusually heartless act after hearing members of the public testify about how people need a higher minimum wage beyond the $5.15 an hour state minimum and the $2.13 per hour that tipped employees get.

The committee ignored testimony from several advocates of raising the minimum wage, including a former state lawmaker who now works as a waitress.

Strangely, the move to increase the minimum wage this year even lost the sole Republican vote it had in the House in 2014, Rep. Mike Madden.

The sponsor of House Bill 24, Rep. James Byrd (D-Cheyenne), told the panel he was only seeking to raise the state minimum wage to $9 an hour, and to $5 an hour for tipped employees. The current federal minimum wage is $7.25 an hour, but recently many states and municipalities in the country have been raising the minimum rates.

“This allows [minimum-wage workers] to purchase an extra bag of groceries, a tank of gas, an extra pair of shoes for their kids,” Byrd explained. “This money gets turned over two or three times in the community.”

Businesses inside the state of Wyoming that do not engage in interstate commerce or do not fall under the Fair Labor Standards Act only have to pay their workers $5.15 an hour. Wyoming and Georgia are the only two states in the nation that have set their minimum rates that low.

Once again, Wyoming legislators have shown how out of touch they are with Wyoming residents on important issues. A poll in Wyoming by DFM Research Inc. of St. Paul, Minn., in late 2013 found 69 percent supported raising the state’s minimum wage from $5.15 an hour to $9.

It’s important to note that women who were polled strongly backed the increase, with 76 percent support.

For many years Wyoming has had the worst gender wage gap in the nation. Now it’s ranked 49th in the nation, ahead of only Louisiana, with women making only 69 cents for every dollar a man makes. Legislators have never stepped forward and even tried to bridge that gap.

Diana Adler, representing the Catholic Diocese of Cheyenne, issued a challenge to the Revenue Committee on Friday. “I think that anyone who would sit down and try to do a budget on what it takes to live in Wyoming minimally, and then try to do that on the minimum wage as it stands, you’d be sorely challenged not to come up extremely short,” she said.

Casey Quinn, a University of Wyoming student and intern at the Equality State Policy Center, said the minimum wage has been static for so long it has lost much of its buying power. He said when the federal minimum wage in 1975 was $2.10 an hour, annual tuition at UW was $411. Today, tuition is $4,400 a year.

“We believe the people of Wyoming at the low end deserve a raise,” Quinn asserted. “They would spend it, and a hike in the minimum wage would help the economy to grow, because they would spend it on necessities.”

Wende Barker, a former three-term House member from Laramie who is now a waitress/supervisor at a Cheyenne restaurant, made an emotional plea to the panel. Of her server team, she related, “At least three of them are in abusive relationships they can’t leave for financial reasons.”

“Two of them worked until they were eight and a half months pregnant, three are involved in post-secondary education, and we have 37 children among us,” Barker continued. Because her employer won’t pay health benefits for employees who work less than full-time, she said all of the servers she supervises work a maximum of 30 hours a week.

“Everybody here talks about a hand up instead of a hand out,” Barker said. “I don’t care what your political persuasion is, right, left, Republican, Democrat, independent, give us a hand up.”

Chris Brown of the Wyoming Lodging and Restaurant Association said tipped employees in his industry make only $2.13 an hour, but the business owner is required to track tips and make up the difference if their pay and tips do not at least equal the federal minimum of $7.25 an hour.

After the meeting, Barker refuted several of Brown’s statements. “I don’t know any owner who does that,” she said, referring to the so-called tip credit. She added that all of the waitresses she works with earn $2.13 an hour plus tips, except one long-time employee who makes $3 an hour in addition to tips.

“She saw a raise the last time in the 1980s,” Barker said. “Nobody’s going to get a raise. Corporate is not going to let it happen.”

Brown called his industry “a critical one in Wyoming that employs more than 30,000 workers and provides a tremendous opportunity for employees to work toward the middle class and above.”

He called the minimum wage “generally an entry-level wage [an employee] can quickly work up from. Brown recalled he began as a dishwasher 20 years ago but “worked my way up fairly rapidly.”

Brown said HB 24 “would result in less opportunity for entry-level workers, and in particular servers.”

He referred to a National Restaurant Association report that examined the impact of minimum wage hikes in the Northwest. Brown said raising the minimum wage in Oregon in 1996 resulted in an average loss of three employees per restaurant by 2011. He claimed that amounted to losing 23,000 industry workers statewide.

John Andrews of Little America in Cheyenne said he also started as a dishwasher. “High school kids require a little bit more supervision and training — they’re worth the minimum wage, but not much more than that,” he said. “If this bill passes we won’t be able to do that anymore, so they won’t have that opportunity.”

Mr. Andrews seems to have forgotten that, under the Fair Labor Standards Act, employers can pay a “youth minimum wage” of only $4.25 an hour to employees who are under 20 years of age during the first 90 consecutive calendar days after initial employment. So federal law does provide reduced wages for on-the-job training of teenagers. The state could do the same if it wanted to.

Brown said many of his servers make more than his managers. Mike Mosher, director of the Wyoming State Liquor Association, said when he owned a restaurant, “I often had servers make more than I did.”

It’s worth noting that, while all server jobs are challenging, some pay better than others. Owning a restaurant is rarely a path to riches, and most owners fail at it, but that doesn’t mean that employees shouldn’t be fairly compensated. Mosher and Brown should be ashamed of themselves for trying to justify low wages in this way.

Mary Lou Chapman of the Rocky Mountain Food Industry Association said about half of tipped employees are under 24 and work part-time. Of course, that means about half are also over 25 and work part-time.

“Raising the minimum wage tends to make our industry and others reduce employment, not increase it,” she said.

“Even though [an increase] may sound warm and fuzzy, it doesn’t help the employees,” Moser agreed.

Others say the situation is much different than Wyoming restaurant officials claim. The website “raisetheminimumwage.org” said tipped workers are more than twice as likely to fall under the federal poverty line, and nearly three times as likely to rely on food stamps as the average worker, according to a 2011 study by the Economic Policy Institute. So that just means taxpayers are subsidizing restaurant owners.

Seven states have set the base wage for tipped workers equal to 100 percent of the full minimum wage, ensuring that tipped workers are paid the full minimum wage directly by their employer. The key word in that sentence is “ensuring,” not leaving it up to business owners to follow the law, or making workers afraid of losing their jobs if they press employers to make up the difference if their tips are low.

Is there any truth to the claims that employers can’t possibly afford to increase the tipped minimum wage? You be the judge: a 2013 analysis from the University of California-Berkeley examined every increase in the tipped minimum wage on the state level since 1990, and found “the evidence … does not indicate that there are significant negative effects of tipped wages or regular minimum wages at the levels experienced in the U.S. since 1990 in full-service establishments.”

The website noted in Washington, Oregon, Nevada, and Alaska, the tipped minimum wage ranges from $7.75 per hour to $9.19 per hour – over 360 percent higher than the current $2.13 federal tipped minimum wage. Restaurant industry job growth in all of these states is actually expected to significantly exceed the national average.

The chairman of House Revenue, Rep. Mike Madden (R-Buffalo ), said he doesn’t like seeing Wyoming’s minimum wage of $5.15 so far below the federal minimum wage. “They stick us right at the bottom around Mississippi or something,” he said (actually, it’s Georgia). “That’s the kind of thing I don’t like, and that’s why I would support a minimum wage [increase] if it’s not unreasonable. But that’s just me.”

Apparently, a few minutes later he changed his mind, after freshman Rep. Joan Dayton (D-Rock Springs) was the only one to vote in favor of HB 24. Chairmen always vote last, and when it came time for him to weigh in on the issue, he shrugged his shoulders and said, “No.”

We guess that’s just him.

Barker said the figures in Byrd’s bill — $9 an hour for most workers, and $5 for tipped employees — may have been too high. But she still thinks the Legislature could have boosted the tipped workers up to $3.50 or $3.75 an hour — “just something to give them a little help paying their bills.”

The former legislator estimated that 80 percent of her restaurant co-workers receive some type of assistance, either from the government, churches or relatives.

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