This week, the U.S. House plans to vote on a $1.9 billion Covid relief bill that includes a key provision for American workers: The first increase in the federal minimum wage since 2009, which would reach $15 an hour by 2025. The proposal has already encountered rough waters in the Senate, where Republicans stand opposed and even some Democrats, such as West Virginia Sen. Joe Manchin, think it goes too far, arguing instead for an increase to just $11. The wage increase would provide an enormous boost to minimum-wage workers, but this particular proposal actually goes further, giving a raise to millions of American workers who currently work for less than minimum wage.
Advocacy groups such as One Fair Wage are fighting to highlight this element of the minimum wage conversation, arguing that all workers should have access to the same base wage, regardless of their field of employment, disability, age or carceral status. A unified federal minimum wage that applies to everyone will fight poverty, tackle racialized wage disparities, and lift up local economies, they argue. Under this proposal, one in five American workers would get a raise, though a heavily criticized Congressional Budget Office estimate suggested 1.4 million could lose their jobs. Researcher Arindrajit Dube, writing for the Washington Post, notes the large body of evidence on minimum wage and job loss did not support this extreme conclusion. Low-wage jobs may be eliminated, but they will be replaced by opportunities for higher earnings.
Three separate subminimum wages are addressed in the bill: The tipped or “wait” wage, which remains frozen at $2.13 an hour; the practice of paying subminimum wage to disabled workers with a waiver from the Department of Labor known as a 14©; and paying youth under the age of 20 less than full minimum wage for a 90-day calendar period at the start of their employment. The bill does not address pay for incarcerated workers, who earn less than a dollar an hour in many states.
More than 1.3 million workers are subject to the tipped minimum wage, which allows employers to pay below minimum wage under the assumption that tips will bring up the total hourly pay, and make up the difference with a “tip credit.” The proposal attracted considerable attention in 2018 during a vicious battle in Washington, D.C., over Initiative 77, a ballot measure that repealed the tip credit only to later be reversed by the D.C. Council. Organizations such as the National Restaurant Association and Restaurant Workers of America, which launched an impressive astroturf campaign in the Initiative 77 fight, have been vocal opponents of a tipped wage repeal. Proponents of the tipped minimum wage argue that a repeal would be damaging to the restaurant industry, resulting in job losses, increased prices, or even closures. But analysis by the Economic Policy Institute does not support these claims and One Fair Wage notes that in states lacking a tipped minimum wage, the restaurant industry is actually experiencing growth.
The subminimum wage for disabled workers applies to employment settings known as sheltered workshops — something some parent advocates support—and it’s based on the argument that disabled people are less productive, so can be paid differentially. Sheltered workshops are also supported by Congressional Republicans like Rep. Madison Cawthorn (R‑N.C.) and Sen. Mitt Romney (R‑Utah), who cited them as in need of “protection” in the rollout of his own minimum wage proposal, which pointedly preserved 14© certificates and as well as the tipped wage, while raising the minimum to just $10 an hour by 2025. Sheltered workshops employed an estimated 400,000 disabled people in 2012, a number that is beginning to drop as a growing number of states, including Vermont and Maryland, eliminate them altogether. They pay disabled people pennies on the dollar for performing segregated work in employment environments that typically involve highly repetitive, simplistic tasks.
Atrocious labor violations take place in sheltered workshops; one of the most shocking cases was settled in 2013, when 32 disabled workers at an Iowa turkey processing plant received a $240 million judgment. The men had earned $65 each month while being housed in filthy conditions without access to medical care. The disability community argues that competitive, integrated employment is a right for disabled workers, and that transitioning to better employment preparation, supported employment and incentives to hire disabled workers will help people achieve self-sufficiency at a fair wage.
The youth minimum wage represents an outdated carveout in minimum wage law, conjuring up the image of teens with summer jobs rather than working adults. A full 4.7 million workers are between the ages of 16 and 19, including young adults supporting themselves and their families. The practice of allowing employers to underpay them devalues their work, and is an easy fair pay loophole to close.
A robust economic recovery bill must include protections for workers that apply not just in crisis, but into the future. Any minimum wage increase must include wage parity for all, and the abolition of subminimum wages. It’s critical for Democrats to retain these elements of the minimum wage increase as the Covid relief bill makes its way through Congress and the Senate’s arcane reconciliation process. Diluting the call for $15 for all wouldn’t just be a slap in the face to workers, it would also simply kick the issue further down the road. This moment represents a unique opportunity for lawmakers to make lasting change in the lives of some of America’s most valuable, and underpaid, workers.
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