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Report: Workers Lose Billions in Wages Thanks to Corporate Campaign to Block Local Minimum Wage Increases

New York, NY—As popular progressive movements like the worker-led Fight for $15 have gained ground in recent years, conservative state legislatures have sought to block their progress by passing “preemption” laws that take away cities’ and counties’ power to adopt all sorts of local policies, including local minimum wage policies. As a result, nearly 350,000 workers are losing billions in wages every year, according to a new report from the National Employment Law Project that offers a first-of-its-kind analysis of the impact of state wage preemption laws.

NELP’s report looks at the 12 cities and counties that passed a higher local minimum wage but then saw their state legislatures invalidate those laws and prohibit all local minimum wages. NELP found that close to 350,000 workers are losing nearly $1.5 billion in wages per year, with each worker losing around $4,000 annually. The affected workers are disproportionately women and people of color. They are also mainly adults, with many age 30 or older.

“Our report shows that the corporate lobby has used its money and influence in state capitals to strip local communities of basic powers in order to boost their profits, costing minimum wage workers billions of dollars in wages,” said Yannet Lathrop, a researcher with the National Employment Law Project and report coauthor. “This abuse of preemption also has harmed our democracy by effectively cancelling out the voices of Black and Latino workers, and other people of color who want and need stronger rights and protections locally.”

Today, 25 states “preempt” or prohibit local governments from adopting local minimum wage laws; more than half of those state preemption laws were passed after the Fight for $15 movement launched in 2012.

NELP’s analysis confirms that minimum wage preemption especially harms communities of color. In three cities NELP looked at—Birmingham, Miami Beach, and St. Louis—the overwhelming majority of workers affected by minimum wage preemption were people of color; the latter also made up substantial shares of affected workers in six other localities analyzed by NELP.

In Missouri, an overwhelmingly white legislature undid the will of St. Louis and Kansas City residents, even after the Ferguson Commission recommended raising the minimum wage.

“When I first started working for McDonald’s, I only made $7.25 an hour,” said Bettie Douglas, a McDonald’s worker in St. Louis and leader in the Fight for $15. “The salary wasn’t enough to help me provide for my three sons, one of whom has autism. So it was a relief when local lawmakers in St. Louis agreed to increase our minimum wage to $10. It didn’t take long, though, before state lawmakers overturned that ruling, leaving me once again struggling and worrying about whether I’d be able to pay rent each month. My colleagues and I at the Fight for $15 decided to fight back. We rallied, marched, and protested until employers like mine listened to us instead of lawmakers and lobbyists backed by greedy corporations like McDonald’s. I now make $10 thanks to our efforts. This is a testament of the power workers have when we use our voices to fight injustices like preemption.”

“St. Louis and Kansas City workers made history when they won some of the first local minimum wages in the Midwest, but our community was shocked when our state legislature attacked the integrity of our cities and counties by invalidating our laws and stripping away our local powers,” said Richard von Glahn, policy director with Missouri Jobs With Justice. “Our legislature has gone so far as to pass minimum wage preemption laws multiple times even after courts questioned their validity. The legislature’s latest preemption of local wages in 2017 was even more galling considering the Ferguson Commission’s recommendation to raise wages as a way to address racial disparities following the killing of Michael Brown. Our community fought back by organizing more than 200 businesses to voluntarily adopt the higher St. Louis minimum wage. In 2018, Missouri voters passed one of the highest statewide minimum wages through a citizen-run ballot initiative that took the vote directly to the people, bypassing the corporate-controlled state legislature.”

Dan Gelber, mayor of the City of Miami Beach, reflected on his own city’s battle over minimum wage preemption: “The City of Miami Beach has one of the highest costs of living in Florida. Our state’s minimum wage of $8.46 per hour does not come close to supporting a single, full-time worker, much less a worker with children or other dependents. This is why in 2016, our city unanimously approved a local minimum wage that would reach $13.31 by 2021. We believed that our workers deserved a living wage and that our strong economy could support it. We also believed that Florida’s voters had protected our right to adopt a local minimum wage in our state’s constitution in 2004, even though our state legislature passed a law in 2003 to block local minimum wages. Unfortunately, after a long legal fight, the courts agreed with state legislators and blocked our law. Nevertheless, the City of Miami Beach will continue to fight for our workers and the right to put our local democracy to work when our state laws simply don’t do enough to protect our residents.”

But workers and advocates are fighting back. Colorado recently passed a bill repealing an old law that prohibited local minimum wages, and 11 other states introduced similar preemption repeal bills this past legislative session.

“Colorado’s workers and local officials know that preemption of local minimum wage laws translates to thousands in lost wages for our communities,” said Lizeth Chacon of the Colorado People’s Alliance. “Colorado workers have not let state legislators stop them from asserting their needs, however. Colorado’s workers have now raised the state’s minimum wage twice through ballot initiative, and they’ve now won the first legislative repeal of a state law banning local minimum wages. We are optimistic that reclaiming our power to adopt local minimum wages will mean a better future for countless Coloradans who cannot afford to make ends meet on the state minimum wage.”

READ THE REPORT:
Fighting Wage Preemption: How Workers Have Lost Billions in Wages and How We Can Restore Local Democracy

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The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers. For more about NELP, visit www.nelp.org. Follow NELP on Twitter at @NelpNews.