Are New Minimum Wages Fueling Layoffs?

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Posted by LaborLawGuy | Posted on 19-01-2009

Category : Federal Labor Law, State Labor Law

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Many have argued that minimum wage laws price certain people out of the job market skill-wise and also lead to layoffs as small businesses cope with their finances and the added burden of higher wages.

In this light, it’s notable that fully 40 percent of the 693,000 who lost their jobs in the latest ADP report (November-December 2008) were from small businesses.

Arthur Bruzzone, a former California state commissioner, frequent columnist and native of the city, writes that San Francisco is really courting disaster with its minimum wage of $9.79 (one of two cities with minimum wages above $9). Team that new rate with mandates to provide health care, paid sick days and transportation assistance, and you can see that City by the Bay small businesses are headhunting–counting heads to chop off the payroll, that is.

In “City Hall’s ‘progressive’ small business mandates will now exact pain,” Bruzzone writes:

City Hall is responsible for bleeding San Francisco’s small businesses.  Now the City Hall’s progressive initiatives will bring real pain to thousands of San Franciscans. Of course, those who keep their jobs will have sick leave, health care, higher hourly wages.  But what of those who have no job?

Another in a series on the unintended (but foreseeable) consequences of good intentions.

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Come Morn and Minimum Wage Rates Surge

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Posted by LaborLawGuy | Posted on 31-12-2008

Category : Federal Labor Law, Random Musings, State Labor Law

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Some eleven states and two munipalities are raising their minimum wage hourly rates on New Year’s Day 2009, topped by the City of Santa Fe with its $9.92 rate (closely followed by San Francisco at $9.79).

Heading the states is Washington at $8.55 an hour. For a full list, check out this site.

The federal rate goes to $7.25 on July 24, 2009, but most of the January 1 state increases already match or top that except for Florida ($7.21) and Arizona ($6.90).

Employers, if you want to keep compliant with federal and state labor law posting requirements, check your requirements on this site.

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FMLA, Minimum Wage Changes Abound in 2009

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Posted by LaborLawGuy | Posted on 10-12-2008

Category : Federal Labor Law, State Labor Law

Tags: , ,

I won’t even begin to get into the changes to the Family Medical Leave Act (FMLA) coming into force on Jan. 16, 2009, but as many have mentioned, the FMLA Final Rule (registered on Nov. 17) is a boon to families of service members and to employers, the latter of whom now get a better structure for dealing with FMLA requests.

More on that perhaps another time.

For now, let’s look at changes coming to the minimum wage.  In addition to Puerto Rico and the District of Columbia, 25 states will be raising their minimum wages in 2009, with Washington topping the list at $8.55.  Compare this to the new federal minimum wage, which kicks in July 24, of $7.25

Incredibly, the two highest minimum wage laws are in cities, and both take effect Jan. 1, 2009.  San Francisco is upping its minimum to $9.79 an hour, while Santa Fe is pegging its rate at $9.92 an hour.

I’ve heard some talk (probably wishful thinking) coming from Obama supporters of upping the federal minimum wage to become a living wage (in the neighborhood of $11 or so an hour).  We’ll just have to wait and see on that one.

There’s also the little matter of the Employee Free Choice Act (EFCA), which would legalize unionization of a company by “card check.”  As soon as more than 50 percent of employees sign these cards, zap–here comes the union to start negotiation.

EFAC, needless to say, has many employers more than a little concerned.

Again, more on that in a future post.

For now, thanks to Ann Barnes at the Compensation Force blog for compiling the list of  25 states’ raising their minimum wage.

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Cities With the Best Minimum Wages

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Posted by LaborLawGuy | Posted on 03-12-2008

Category : Federal Labor Law, Random Musings, State Labor Law

Tags: ,

I promised to get back and post here in my first entry on this new blog, so here goes.

Regardless of what you think of minimum wage laws (business owners generally hate them while workers and advocates generally favor them), it’s pretty hard to survive on a minimum-wage existence.

Consider this:  San Francisco and Santa Fe, two cities that maintain their own minimum wage laws (which are higher than both the federal and state wage standards), will raise their rates on New Year’s Day–San Francisco to $9.79 an hour and Santa Fe to $9.92.

I did a quick calculation on what these rates would guarantee a worker.  In San Francisco, $9.79 an hour would garner $391.60 per 40-hour week and $20,363.20 for a 52-week year.  In Santa Fe, the equivalents would be $396.80 a week and $20,633.60 a year. 

As you can see, that ain’t much.  It would be hard even to rent a decent apartment and feed yourself on those wages given the high cost of living in both of those places.

However, that still doesn’t resolve the issue of whether minimum wage laws help or hinder the overall economy.

The standard saw against minimum wages has been that it prices the young, unskilled and undereducated out of the economy, thus leading to other costly social problems.  Of course, the argument inn favor is a basic one–if we didn’t guarantee a minimum wage, people would be forced to work for peanuts.

Of course, the way our economy is going, we may all be forced to eat peanuts soon enough, anyway.

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