Don’t look now, but the minimum wage is quite the hot topic. While there is little chance Congress will act on it this year, some cities have moved to raise their wage floors, and a number of states have ballot initiatives under consideration this November. Raising the minimum wage has even earned support from at least one conservative millionaire.
There are, of course, numerous upsides to raising the minimum wage, one of which is a trove of political benefits for Democrats. More importantly, raising the minimum wage is a first step toward alleviating income inequality–which is a more serious problem than we thought.
However, raising the minimum wage is not the only way to give workers better pay. Other policies have gotten some coverage lately, and are possibly more important than the minimum wage debate. Why? Because they focus on giving workers what’s owed to them in the first place. I outline these debates below.
Earlier in March, President Obama announced he would order the Labor Department to revise its rules on overtime pay. Under current law, workers who earn more than $455 a week can be denied overtime pay if they supervise other workers, even if that is a fraction of their work.
As the New York Times reported, only 35 percent of workers were not guaranteed overtime pay in 1975. Compare this to 2004, when the $455-per-week threshold was set, and 82 percent of workers were not guaranteed overtime. (Supporters of these laws claim they were designed to apply to white-collar workers, not lower-paid employees.)
The overtime threshold hasn’t kept pace with inflation, much like the minimum wage, but the 2004 update to the Fair Labor Standards Act codified this supervision loophole into law. To correct these ineffective regulations, Obama is directing the Department of Labor to change the rules. A public comment period will be included in this process, and business groups are expected to weigh in heavily against the Obama administration’s final proposal.
While Republicans are not happy about more executive actions, this kind of rule change ensures lower-level workers are paid fairly for their work.
Obama’s new order simply closes a loophole which allowed companies to violate the spirit of the law, if not the letter. But, there’s another, more insidious issue contributing to income inequality: wage theft. And it’s actually illegal.
As was the case with protests to raise the minimum wage, fast food restaurants are also major offenders of wage theft. Protests in around 30 cities in March were initiated by workers who were improperly denied wages. Some claimed money was deducted from their paychecks to cover the cost of their uniforms, or that they had to wait to clock in until a certain time. According to one study, 84 percent of fast food workers in New York City were victims of wage theft from 2012-2013.
Here, the remedy is mostly legal, not legislative. In March, seven McDonald’s franchises in New York agreed to pay $500,000 to workers who were denied full pay in violation of state law. Class-action lawsuits are underway in New York, California, and Michigan. McDonald’s has said it is investigating the claims.
Fast food employees aren’t the only victims, however. One report found that Californian port trucking companies were responsible for $850 million in stolen wages per year, due to misclassifying workers as independent contractors.
That’s bad news for those drivers, but also for taxpayers. Nationwide, lost wages add up to $1.4 billion in lost tax revenue. Proponents of raising the minimum wage make a similar argument, since raising it will reduce taxpayer spending on programs like food stamps.
As with the minimum wage, these steps are still not cure-alls for income inequality. What’s more, these issues are more complicated than simply saying, “we need to raise the minimum wage,” and there’s not as many opportunities to actually push legislation around them. “Stop wage theft,” or “Where’s my overtime?” probably won’t end up being campaign slogans for Democrats in 2014 the same way raising the minimum wage may be.
But these issues still matter. After all, raising the minimum wage has less impact if employers can still avoid paying their employees fairly.
If Republicans are serious about defending “the dignity of work,” tackling these issues would be a good place to start. Even if you oppose raising the minimum wage, there is nothing dignified about cheating someone out of a full paycheck.