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States and Cities Respond to Minimum Wage Discussion

Minimum wage issues often cause corporations, companies, and other commercial interests concern in the absence of clarity and answers to, “What if…” questions.

The past year saw minimum wage activity across all planes of American government, included the states and local government. This is an issue of concern to scrap recyclers particularly in at a time that their industry is particularly economically pressed.

The 2016 state legislative sessions saw substantial increases in state and local activity surrounding the minimum wage. In some states, bills were introduced to restrict their localities’ ability to increase minimum wages on their own or otherwise impose local employer mandates. Despite this preemptive legislation, some major localities passed landmark minimum wage regulations.

As the national presidential primaries raged on earlier this year, particularly with the Democratic candidates, the minimum wage debate came front and center. This national attention has helped bolster support for the movement at the state level. After a relatively inactive 2015, roughly 200 minimum wage bills and 12 ballot measures were introduced in 40 states this year.

Several populous states hiked minimum wages this year. Most notably, in April, California passed CA S.B. 3, which will increase the minimum wage from $10 to $15 per hour by 2022. Also in April, New York Governor Andrew Cuomo (D) signed NY S.B. 6406 as part of the state budget that will increase the minimum wage to $15 an hour by December 31, 2018 in “downstate” New York counties and New York City. In “upstate” New York counties the minimum wage will be gradually increased to $12.50 by 2021. Here, the minimum wage varies not only by geographic region but also employer size. More recently, the New Jersey legislature passed NJ S.B. 15, increasing the minimum wage from $8.38 to $15 by 2021. However, at this writing, according to news reports, Gov. Chris Christie (R) will likely veto the bill.

>In some states, however, public support for raising the minimum wage met strong Republican opposition, generating perhaps predictable conflicts between Republican-led state legislatures and Democratic-controlled cities. As we previously reported in Scrap Policy & Advocacy News, the Alabama legislature passed AL H.B 174 in March, which prohibits local governments from imposing minimum wage requirements on private employers. The legislation was a direct response to an ordinance passed by the Birmingham City Council in February, which would have increased the minimum wage to $10.10. The Alabama law effectively blocked the council’s attempt. More recently, Idaho has also adopted legislation prohibiting political subdivisions from raising the minimum wage above the state limit of $7.25.

A few state legislators went in the opposite direction and introduced bills that specifically upheld a locality’s ability to pass its own minimum wage regulations, such as NJ A.B. 2581 and NY A.B. 5835. In a different tactic, North Carolina introduced a resolution asking the general assembly to consider a bill allowing cities and counties to adopt local minimum wage regulations.

Cities Get in on the Action

In 2014, Seattle became the first major city to pass an ordinance increasing the local minimum wage to $15 per hour. A year later, San Francisco and Los Angeles joined suit and passed similar ordinances. Recently, several other major cities have taken steps to increase their minimum wage beyond the state-specified rate. On June 27, 2016, Washington, DC Mayor Bowser (D) signed a law that will gradually increase the district’s minimum wage until it hits $15 per hour in 2020. Following these actions, the neighboring Maryland suburb of Montgomery County also introduced a local ordinance supporting a $15 minimum wage. The bill replaces similar local legislation that went into effect in 2014 that will raise the Montgomery County minimum wage by annual increases to $11.50 by 2017. Both pieces of legislation exceed the state rate outlined in the Maryland Minimum Wage Act of 2014, which calls for the minimum wage to be raised ultimately to $10.10 per hour by July of 2018. In April, the Baltimore City Council also introduced a $15 minimum wage proposal. So far, the state legislature has not shown any interest in enforcing against either piece of local legislation in Maryland.

In Cleveland, local unions and grassroots organizations gathered enough support to compel the city council to introduce legislation for a $15 per hour minimum wage. In contrast to proposals in other cities, which provide for gradual increase over a 5 to 7 year period, the Cleveland proposal would impose the $15 requirement on any business with more than 25 employees beginning in January 2017. As a result, many in Cleveland’s business community are staunchly opposed to the bill. However, it seems that business owners might not have to worry about the proposal this year. According to news reports, the wage proposal will likely not appear on the November ballot because of city deadlines for ballot proposals. If the proposal has to wait until next year, it will be interesting to see how Governor Kasich (R) and other Ohio lawmakers respond, as Ohio did not introduce any preemptive legislation this session.

In states with preemption laws already in place, some city councils have defiantly voted to raise the minimum wage. Earlier this month, Miami Beach’s City Commission unanimously voted to create a minimum wagelaw. Miami Beach is the first Florida city to set a local minimum rate higher than the state rate of $8.05. The new local legislation will increase wages to $13.31 by 2021 and is direct challenge to the state's preemption law. According to the Miami Herald, Miami Beach’s legal department is arguing Florida’s preemption legislation is unconstitutional because of an amendment to Florida’s constitution passed in 2004 that seems to open the door for local governments to create their own wage laws.

Even in states that have already raised the minimum wage, localities are still pushing for faster increases. For example, in California, Santa Clara County began exploring the possibility of increasing the county wide minimum wage to $15 by 2019, almost one year before Governor Brown (R) approved increasing California’s minimum wage to $15 by 2022. Initially, there were concerns that local advocates would abandon previous efforts after the state legislation passed. However, representatives from the county’s Cities Associations endorsed a regional $15 wage by 2019 at the June 10 meeting. The next step would be for the county council to formally introduce a bill.

Minimum wage will no doubt continue to be a contentious issue in the coming months. Now that many states have adjourned for the year, the focus for many advocacy groups will most likely turn even more to localities. In 2016, wage hike campaigns have experienced unprecedented success in the Washington, DC Metro Area as well as in major cities like New York and Miami Beach. The outcome of the Miami Beach ordinance may determine whether activist groups choose to expand their local campaigns to more Republican states with restrictive local wage laws.

So, what does all this mean for the scrap recycling industry? One thing is for certain, arguments that the industry cannot afford increasing the minimum wage in these tough economic times will not suffice. In fact, the trend seems to support the notion that the worse the economy, the more emboldened local and state government feel to raise the minimum wage.  ISRI members need to remain vigilant and engaged as policymakers review the status quo and consider changes that will have significant impacts on company operations and expenses. In this case, as in most, having a good offense by being proactive is your best defense. Stated another way, as we often say at ISRI, “If you’re not at the take, you’re on the menu.” You need to know your local and state officials before the debate comes to your locale. Contact ISRI to learn how your trade association can help.

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