Local Legislation vs. State Legislation Compliance Issues Can Make Things Complex For Business - CUE, Inc.
  • Local Legislation vs. State Legislation Compliance Issues Can Make Things Complex For Business

It’s critical to keep up with local legislation.

The fight against the Fight for $15 and similar local based ordinance legislation continues, and appears to be winning, at least to a report published by the left-leaning Economic Policy Institute.  According to EPI, the report looks at the rising use of preemption by state legislatures to undercut local labor standards. It provides an overview of five key areas of labor and employment policy affected by preemption—including minimum wage, paid leave, fair work scheduling, prevailing wage, and project labor agreements—and details the extent and impact of such preemption practices throughout the United States.

It does not examine the compliance burdens such legislation can place on businesses operating in more than one location in a state, or on a national scale.

Last Friday, Illinois Governor Bruce Rauner vetoed legislation to increase the state’s minimum wage to $15 by 2022. All of this comes on the heels of negative reports from San Francisco and Seattle regarding a hike to $15. You can find real world stories of business closures and lost jobs via the “Faces of 15” project found at facesof15.com.

Below is an excerpt from a State Journal Register op-ed from earlier this month by Jordan Bruneau, senior research analyst at EPI. In the op-ed he discusses the dangers of a $15 minimum wage hike in Illinois based upon lessons learned from Seattle’s minimum wage hike.

A minimum wage increase that reduces wages?

That’s the conclusion of a major new University of Washington minimum wage study, conducted by a research team funded by the City of Seattle. And it couldn’t come at a worse time for Illinois’ minimum proponents who are hoping Gov. Bruce Rauner will sign the $15 legislation currently on his desk.

The study, conducted by a diverse group of experienced economists, found that Seattle’s employees earning less than $19 an hour — roughly Illinois’ median wage — lost $125 per month on average. In other words, the boost in hourly pay was offset by a loss in work opportunities, after the city’s then-$13 minimum wage forced employers to reduce hours worked by 9 percent.

The study also found the wage hike reduced the number of these jobs by 7 percent. This job loss conclusion is in line with the best economic research on the topic, including a 2014 review by the nonpartisan Congressional Budget Office which found a $10.10 federal minimum wage would cost 500,000 jobs. “Basically, what we’re doing is we’re removing the bottom rung of the (career) ladder,” said study author Jacob Vigdor.

This minimum wage study stands out from its peers because its economists had access to private payroll data on all affected employees in the city. This breadth of data provides a far more accurate result than competing studies that use restaurant employees as a minimum wage proxy. David Autor, one of the nation’s leading labor economists, called the study “very credible” with the “statistical power that it can change minds.”

That doesn’t mean the study hasn’t been controversial — among advocates for $15, anyway. Upon learning about its forthcoming results, Seattle’s Mayor and $15 champion Ed Murray requested a report from a team of UC Berkeley researchers. This attempt to try to dull the UW study’s impact backfired as the mayor’s office has come under intense criticism for study shopping and politicizing economics.

15 States Have Passed Preemption Bills Since 2016

Fifteen states passed bills to pre-empt labor legislation between January 2016 and July 2017, according to a report from the left-leaning Economic Policy Institute.

Alabama, Arkansas, Idaho, Iowa, Kentucky, Missouri, North Carolina and Ohio enacted legislation to pre-empt minimum wage hikes. The report noted that Missouri’s pre-emption law, which takes effect today, will stop St. Louis from enacting 2015 legislation that raised the city’s minimum wage to $11 by 2018.

Arkansas, Iowa, North Carolina, Ohio and South Carolina enacted legislation to pre-empt paid leave bills.

Alabama, Arkansas, Georgia, Indiana, Iowa, Kansas, Ohio and Tennessee enacted legislation to pre-empt predictable scheduling legislation.

Alabama, Florida, Iowa, Kentucky, Missouri and Wisconsin enacted legislation to pre-empt laws that require the use of project labor agreements and the payment of prevailing wage to workers on public construction projects

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