Tuesday, August 01, 2006

Cutting the Minimum Wage

Labor law blogger Nathan Newman discusses the GOP's "minimum wage" bill, widely noted for providing hundreds of dollars for the lowest earners and huge tax cuts for the super rich. He points out another poison pill built into it:

[T]he bill will actually CUT wages for workers in a number of states by preempting state minimum wage laws for tipped workers. (Link and provision courtesy of the National Restaurant Association) So Paris Hilton's tax cut is going to be coming directly out of the lower wages for tipped workers in California and a number of others states.

. . .

The federal minimum wage is explicit that states and local governments are free to create higher minimum wage rates than the federal level for any and all groups of workers. While the federal minimum wage allows employers to pay a lower wage to tipped workers, a number of states have eliminated this so-called tip credit on the assumption that consumers pay tips not to subsidize low-wage employers but to actually reward service.

But the new House bill would preempt those state laws and actually cut wages for tipped workers in states like California, Oregon and Washington where tipped workers would see a lower minimum wage rate imposed compared to what they were guaranteed under state law.
This would be an unprecedented move by the federal government to preempt state minimum wage laws. Not only would it hurt tipped workers, it would set a precedent for conservatives to try to preempt all minimum wage rates higher than the federal level.

More here.

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