DNC draft platform includes $15 minimum wage – By NICK GASS 07/01/16 04:57 PM EDT Updated 07/01/16 05:03 PM EDT


Workers protest for the the Los Angeles City Council to vote to raise the minimum wage on May 19, 2015. | AP Photo

The Democratic National Committee unveiled a draft of its party platform Friday, calling for —among other progressive causes — a $15 minimum wage, free community college and abolition of the death penalty.

The draft was approved last weekend in St. Louis by 13 of the 15 members on the drafting committee, with one abstention and one who missed the vote.

Supporters of Bernie Sanders have expressed displeasure with the way the platform draft handles Medicare expansion, a carbon tax, a fracking ban and the Trans-Pacific Partnership. Sanders policy director Warren Gunnels told POLITICO that the trade deal is “the most significant issue for us.”

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This Is What Happens When Restaurants Ditch Tipping – By Maddie Oatman and Jenny Luna | Fri Apr. 22, 2016 6:00 AM EDT

In this week’s episode of BITE, we discuss tipping’s racist origins and uncertain future.

Sean Locke Photography/Shutterstock

Is this the end of tipping?

When Danny Meyer, owner of revered eateries like Gramercy Tavern and The Modern in New York, announced last year he’d abolish the practice at his businesses, he helped spark a national conversation about whether paying a gratuity at a restaurant still makes sense. Along with several other renowned chefs, Meyer has revealed the ugly truth about the practice, which until recently was rarely talked about: That tips create a disparity between different employees, they are fairly unregulated and easy to exploit, they are inconsistent and leave servers at the whim of customers rather than the employer.

Oh, yeah—and tipping has roots in racism.

In this week’s episode of Biteauthor and labor organizer Saru Jayaraman tells to us more about tipping’s disturbing origins. Jayaraman isn’t against gratuities, per se, but she feels strongly that the “tipped minimum wage”—the lower wage that restaurant workers take home in all but nine states—has got to go. This lower wage hasn’t increased since the early ’90s—the nineties—and it forces a staggering number of the nation’s 11 million restaurant workers to rely on food stamps.

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Will minimum wage hikes lead to a huge boost in automation? Only if we’re lucky. – Updated by Matthew Yglesias on April 2, 2016, 9:00 a.m. ET

Photo by Kevin Moloney/Getty Images

Photo by Kevin Moloney/Getty Images

As states like California and cities like Seattle boost their minimum wages up to $15 an hour, critics warn that job losses will be inevitable. In particular, one major line of criticism from outlets like the Wall Street Journal editorial page and Forbes’s Tim Worstall is that big increases in pay floors only lead to job loss via automation. Both critics point to initiatives at McDonald’s and Wendy’s to automate more of the service process, and warn that robots, rather than workers, will be the real winners if liberals succeed in boosting minimum pay.

This is doubly wrong. On the one hand, there’s little guarantee that increased minimum wages really will increase the pace at which labor-saving technology is developed. On the other hand, there’s no reason to think this would be a bad scenario. California’s minimum wage hike pushes the issue beyond the terrain in which it’s been studied.

If minimum wage hikes really do spur the creation and adoption of high-quality new equipment to automate elements of, say, the food service industry, then that would be a very positive outcome that implies minimum wage hikes are a great idea. Productivity-enhancing technology, after all, is a crucial pillar of social and economic progress. The problem in recent years is that we haven’t had nearly enough of it.

Given that, a huge increase in automation is really the optimistic outcome. The thing to worry about is that this won’t happen, not that it will.

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California just passed a $15 minimum wage. Even left-leaning economists say it’s a gamble. – Updated by Timothy B. Lee on March 31, 2016, 9:00 p.m. ET

California Gov. Jerry Brown.		Photo by Kimberly White/Getty Images for Fortune

California Gov. Jerry Brown. Photo by Kimberly White/Getty Images for Fortune

The “Fight for 15” movement got its biggest win yet on Thursday as the California legislature passed a bill to phase in a statewide $15-per-hour minimum wage over the next six years. Gov. Jerry Brown is expected to sign the legislation.

There’s a lively debate among economists about the economic impact of minimum wage hikes. Higher minimum wages provide raises to some workers, but some economists argue that they also prompt substantial job losses. Other economists dispute this, saying there’s little or no effect on employment and that businesses compensate for higher costs through reduced turnover, improved productivity at work, lower compensation for better-paid workers, and price increases.

So who is right? When I set out to interview economists about the effects of California’s minimum wage hike, I was expecting some strong disagreements. Instead, I found a broad consensus: California’s hike is so large — and would result in a minimum wage so high — that no one really knows what will happen. None of the three economists I interviewed was willing to make a prediction about how the new law would affect employment in California.

“It would be foolhardy to believe you could project what’s going to happen with any degree of confidence,” said Jeff Clemens, an economist at the University of California San Diego whose research has found that higher minimum wages have caused job losses in the past. That sentiment was echoed by Arindrajit Dube, whose research has suggested that minimum wage hikes do not cause significant job losses.

Of course, that in itself is a reason to be concerned, since California lawmakers are taking a risk with the livelihood of millions of low-wage California workers. But advocates of the California proposal argue that it’s a risk worth taking.

The economic impacts of minimum wage hikes is hotly debated

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Deal reached to boost California’s minimum wage to $15, avoiding ballot box battle – John Myers and Liam Dillon

L.A. rally

At a rally outside Los Angeles City Hall, workers press their demand for a minimum wage of $15 per hour. (Luis Sinco / Los Angeles Times)

Lawmakers and labor unions have struck a tentative deal to raise the statewide minimum wage to $10.50 an hour next year and then gradually to $15, averting a costly political campaign this fall and possibly putting California at the forefront of a national movement.

The deal was confirmed Saturday afternoon by sources close to the negotiations who would speak only on condition of anonymity until Gov. Jerry Brown makes a formal announcement as early as Monday.

The minimum wage compromise ends a long debate between the Democratic governor and some of the state’s most powerful labor unions. For Brown, it’s political pragmatism; numerous statewide polls have suggested voters would approve a minimum wage proposal — perhaps even a more sweeping version — if given the chance.

According to a document obtained by The Times, the negotiated deal would boost California’s statewide minimum wage from $10 an hour to $10.50 on Jan. 1, 2017, with a 50-cent increase in 2018 and then $1-per-year increases through 2022. Businesses with fewer than 25 employees would have an extra year to comply, delaying their workers receiving a $15 hourly wage until 2023.

7 Billionaires Worried about Income Inequality by Erik Sherman NOVEMBER 28, 2015, 10:00 AM EST

Some surprising names on the list. 

Income inequality is a complicated issue. The U.S. is the richest and yet most unequal country in the world when you consider wealth, according to Allianz. And yet, there is economic mobility; many Americans shift income brackets, with 70% of the population experiencing at least one year in the top 20th percentile of income and 53% landing in the top 10th percentile in at least one year.

But as the disparities in wealth and income have become more marked, the national conversation over income inequality, as well as how to shore up America’s middle class, has gained urgency. It has even become a cause célèbre with surprising bedfellows. Democrats and Republicans have both focused on the topic, albeit with different solutions in mind. Harvard Business School alumni have cited it as a major concern — just like union activists and minimum wage workers at the fast food protests.

 And billionaires are no exception. Entrepreneur and investor Nick Hanauer, who sold his Internet advertising company to Microsoft for $6 billion in 2007, most famously warned fellow one-percenters, “If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality.” But he has plenty of company. Some are concerned on moral grounds; others cite the impact on the economy. Here are seven other billionaires who say they are worried about how income inequality will affect America.


Hillary hints at support for $12 minimum wage – July 30, 2015, 03:55 pm

Hillary Clinton hinted Thursday that she’s supportive of legislation hiking the minimum wage to $12.

Clinton, the front-runner in the Democratic presidential primary, has backed the concept of a wage hike on the campaign trail without specifying a figure — a reticence that’s been criticized by her closest rival, Sen. Bernie Sanders (I-Vt.), who’s pushing for a $15 rate.

But on Thursday, after meeting with leaders of the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), Clinton got as close as she’s come to endorsing a specific level, hinting that a $12 minimum wage proposal sponsored by Sen. Patty Murray (D-Wash.) and Rep. Bobby Scott (D-Va.) might offer a viable path forward.

“Patty Murray is one of the most effective legislators in the Senate bar none, and whatever she advocates I pay a lot of attention to because she knows how to get it through the Congress,” Clinton told reporters. “Let’s not just do it for the sake of having a higher number out there, but let’s actually get behind a proposal that has a chance of succeeding. And I have seen Patty over the years be able to do just that.”

Earlier in the press conference, Clinton advocated an unspecified increase in the federal minimum wage — which has stood at $7.25 per hour since 2009 — and then allowing states and local governments to make adjustments as they see fit based on regional cost-of-living variations.

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Seattle Restaurant Data Demolishes Conservative Argument Against $15 Minimum Wage – by Alan Pyke Posted on April 2015

Signs supporting a $15 minimum wage in Seattle CREDIT: AP

Weeks before the first gradual increase in Seattle’s minimum wage kicked in, conservative pundits decided that the city’s vibrant restaurant scene was shuddering to a halt. Numerous prominent outlets on the right touted a thin report in a local magazine that a handful of well-liked restaurants were closing down to avoid the wage law.

High-profile writers confidently proclaimed that Seattle’s once-proud restaurant scene was in retreat and that the wage hike was already chilling business activity and killing jobs, based on one anecdotal report. None of that was true. When the Seattle Times asked them about the story, the restaurant owners in question laughed off the claim that their decisions were motivated by the wage law. But even that direct testimony didn’t stop the media wave all the way. The conservative National Federation of Independent Business ran a post parroting the disproven restaurant closures claim days after the Times debunked the anecdote underlying the narrative.

Now, there’s even harder evidence that the right was wrong. The Big Picture pulled the numbers on how many restaurant permits have been issued by the city each month going back to the start of 2012. The chart shows plenty of ups and downs – what data scientists call “noise” – but the 12-month average for permits is almost perfectly steady:

seattle-restaurant-permits1CREDIT: The Big Picture

The city has been issuing about 25 restaurant permits a month on average, sometimes a little more or less, since late 2012. It continued to do so throughout the 2013 mayoral election when the $15 minimum wage became a near-certainty. The rate held over the subsequent months of negotiating between business, labor, and community leaders. And since the compromise bill to raise the city wage over the next several years became official, it’s hovered right around there. In short, the city restaurant scene “looks very much today (in terms of permits) as it did prior to any notion of a higher minimum wage,” the finance expert who ran the numbers wrote.

In a second post, the author looked at the quarterly figures for total restaurant businesses operating in Seattle, which reflects the net of restaurants closing and opening in the city. The city doesn’t have these figures for the first quarter of 2015 yet. But restaurant owners have known for about a year that gradual minimum wage increases would begin this month. In that time, the numbers show, the city’s restaurant scene has grown consistently, with more people opening up food and drink places than closing them:

seattle-netrestaurantsCREDIT: The Big Picture

Ideological opponents of the minimum wage will doubtless find other avenues to argue against the notion that such laws enhance economic growth. But the Seattle restaurant scene simply isn’t the smoking crater they wanted it to be.

Of course, higher wages will bring changes to how Seattle businesses operate. There just isn’t evidence that their response will be to “go Galt,” in the language of free market fundamentalists who insist that minimum wage laws kill jobs. So far, at least one local restaurant has decided to handle the increase by raising wages to $15 an hour immediately – years ahead of when the law would require it – and do away with tips while raising menu pricessignificantly. Two other restaurants had started printing a 2 percent “Seattle Ordinance Wage Equity Surcharge,” but abruptly canceled that quiet protestdays later after customers said they disliked the notation.

Fight over Seattle’s $15 minimum wage could have national consequences – by Ned Resnikoff March 14, 2015 11:48AM ET

A lawsuit brought by the International Franchise Association could set precedent for how states regulate chains

Screen Shot 2015-03-15 at Mar 15, 2015 5.02

A federal judge will rule early next week on whether to temporarily suspend a portion of Seattle, Washington’s $15 minimum-wage law, pending the outcome of a longer inquiry into whether the legislation is constitutional. The International Franchise Association (IFA), which requested the temporary injunction, is suing the city of Seattle on charges that the new law unfairly discriminates against franchisees. The outcome of that lawsuit could potentially influence wage laws and other labor regulations across the country.

Seattle’s minimum-wage law, which is scheduled to take effect on April 1, requires employers to raise wages at different rates depending on how many workers they employ nationwide. A business with 500 or fewer employees in the U.S. must pay its workers at least $10 per hour starting on April 1, and $15 per hour by the first day of 2021. Businesses with more than 500 employees must pay at least $11 starting on April 1, and are required to raise their wages to $15 an hour by 2019, two years ahead of schedule.

The IFA isn’t trying to block the entire law. It simply rejects the way its members are affected by the distinction drawn between small and large businesses. Seattle counts franchisees among the businesses that will have to raise wages at a faster rate.

In other words, the city is placing franchisees in a separate category from other small businesses due to their licensing agreements with large conglomerates such as McDonald’s Corporation, the world’s largest fast-food chain.

The IFA argues that this violates the commerce clause of the U.S. Constitution because Seattle is attempting to regulate an interstate relationship between a franchisee and the licensing franchisor. Additionally, IFA lawyers charge that the law breaches the First and Fourteenth Amendments by discriminating against franchisees.

The IFA’s argument, if upheld, would not just affect Seattle. When officials in Chicago, Illinois were developing a plan to raise the city’s minimum wage last year, they initially floated a proposal similar to Seattle’s, under which franchisees would have been again regarded as large employers and required to raised their wages to at least $15 per hour at a faster rate than other small businesses. They eventually backed down under pressure from business groups, including the IFA.

Paul Clement, the lead attorney representing the IFA in its lawsuit against Seattle, referenced the defunct Chicago proposal when asked by a journalist for Fortune magazine whether the suit would “have ramifications beyond the city of Seattle.”

“For other jurisdictions looking to increase the minimum wage in a non-discriminatory way, this lawsuit won’t have any impact,” said Clement. “But for jurisdictions — and I think Chicago is one — that are using Seattle’s legislation as a model for their own, that want to borrow not only the $15 wage but the discriminatory provisions as well, then this lawsuit would have direct implications for them.”

Clement, who served as solicitor general under President George W. Bush, has something of a reputation for getting involved in precedent-setting cases. He has argued before the U.S. Supreme Court more than 75 times, including as part of a crucial 2012 lawsuit concerning the constitutionality of the Affordable Care Act.

Asked over email if the IFA viewed the Seattle lawsuit as a potentially precedent-setting test case, association spokesman Matt Haller told Al Jazeera: “Franchises provide opportunities for minorities, immigrants, veterans and first-time business owners to own their own businesses — and they do so at a greater rate than non-franchised businesses. If policymakers in other cities or states create barriers to economic growth and franchise ownership by adopting radical policies like Seattle, they do so at their own peril.”

A much larger fight

The IFA’s lawsuit isn’t just over whether franchisees can be compelled to raise wages at a faster rate than other small businesses; it’s part of a much larger fight over the legal status of franchises, and whether they can be regulated differently because of their licensing relationships with multinational corporations.

While the IFA maintains that a franchise is just a small business, experts like David Weil, head of the Wage and Hour Division at the U.S. Labor Department, maintain that the franchising model is primarily a clever way for businesses like McDonald’s to shift operational costs and legal liability away from corporate headquarters. In his book, The Fissured Workplace, Weil argues that delegating the operation of fast-food restaurants and commercial outlets to smaller franchisees helps keep wages low and working conditions poor.

Franchisees operate on a thinner profit margin than multinational firms, putting them under greater pressure to control costs. Because they have less of a stake in their brand integrity, writes Weil, they “may be more willing to violate consumer, workplace, or environmental regulations in order to reduce labor costs than would be the case for company-controlled units.”

Additionally, labor organizations have charged that many franchisors exert enough control over their franchisees to be considered “joint employers.” Over the past year, former employees at various McDonald’s restaurants have sued both the franchisees and the McDonald’s Corporation itself for wage theft and discrimination, claiming that McDonald’s manages the day-to-day operations of its franchisees closely enough to be legally liable when one of those franchisees violates labor laws. The general counsel for the National Labor Relations Board (NLRB) has supported this reasoning.

The fight over whether to treat McDonald’s as a joint employer with its franchisees is “thematically related” to the IFA’s lawsuit against Seattle, said Seattle University law professor Charlotte Garden.

“Although there are different legal principles at work in the two cases, they are both about the advantages that franchises get from the franchise relationship, especially relating to HR policies,” she said.

Seattle Mayor Ed Murray has justified his city’s treatment of franchisees under the new minimum wage law by saying that franchises “have resources that a small business in the Rainier Valley or a small sandwich shop on Capitol Hill do not have.”

“Franchise restaurants have menus that are developed by a corporate national entity, a food supply and products that are provided by a corporate national entity, training provided by a corporate national entity, and advertising provided by a corporate national entity,” said Murray in a June 2014 statement responding to the IFA’s lawsuit. “They are not the same as a local sandwich shop that opens up or a new local restaurant that opens up in the city. Our process for reaching $15 an hour in Seattle recognizes that difference.”

But Garden said the growing political momentum on behalf of minimum-wage hikes just gives franchisees and franchisors all the more reason to ensure that difference can’t be legally recognized.

“Given the types of legislative compromises that are often necessary to enact a minimum wage increase, I think some within the business community would very much like to advance a vision of the Fourteenth Amendment that subjects classifications of different types of businesses to heightened scrutiny,” she said.

Vox Sentences: Is Walmart’s big raise a sign the economy’s back on track? Updated by Dylan Matthews on February 19, 2015, 8:00 p.m. ET

(Joe Raedle/Getty Images)