The Elusive Minimum Wage


If you happen to follow the American and international labor scene, and want to kill a leisurely hour, an entertaining way of doing that is to visit the Department of Labor’s (DOL) official website.  It offers a wide selection of labor tidbits, explanations of bureaucratic procedures, helpful tips, advice for retirees and disabled workers, and summaries of the DOL’s most recent compliance victories.

Ever since Hilda Solis (President Obama’s first-term Secretary of Labor) resigned the position, Seth Harris has been filling in as acting Secretary, pending confirmation of Thomas Perez, President Obama’s hand-picked nominee.  If this were the 1970s, Perez’s confirmation would be a foregone conclusion.  After all, the man has exemplary qualifications; there would be no reason to oppose him.

But because the right-wing has so effectively hijacked the political middle, and has built up an impressive head of steam, the Perez hearings could get very ugly.  In fact, the only thing standing in the way of an aggressive, full-court press by congressional Republicans is their understandable fear of alienating the Latino vote in 2016.  If they get too nasty with Mr. Perez, 2016 could turn out to be Romney Redux.

Bearing the Department of Labor’s official seal, the DOL site is a combination of office newsletter (chatty, helpful, people-oriented) and standard business “mission statement” (a no-nonsense reminder of what the organization is all about).  One of its features is an explanation of the FLSA (Fair Labor Standards Act), the law that established the federal minimum wage (which, today, stands at $7.25 per hour).

For decades there has been an outcry from conservative lobbyists (e.g., U.S. Chamber of Commerce, National Association of Manufacturers, etc.) and their Republican minions, demanding repeal of the minimum wage, arguing that it impedes growth, contributes to unemployment, and results in hundreds of small businesses—the backbone of the U.S. economy—going belly-up each year.

While that claim makes for good propaganda, the numbers don’t support it.

Besides the fact that $7.25 is a pitifully meager wage to pay your employees (if you honestly cannot afford $7.25/hour, should you really own a business?)—and besides the fact that the federal minimum doesn’t increase automatically with the cost of living, but requires an act of Congress to raise it even 10-cents (and we know how malleable Congress has been lately)—the number of exemptions to the federal minimum wage is positively staggering.

It’s true.  Some of those exemptions:  workers with disabilities (any disability), full-time students, apprentices, companions for the elderly, farmworkers, fishermen, newspaper deliverers, waiters and waitresses, and switchboard operators.  As for the tiny businesses those lobbyists are trying to “protect,” the minimum wage exempts any enterprise with less than $500,000 per year in sales or business.  These are only some of the exemptions.  Check out the website for more.

Another interesting exemption:  It’s legal to pay a person $4.25/hour for a period of 90 days, provided that person is younger than age 20.  Unfortunately, labor unions have long been aware of unscrupulous companies who hire recent high school grads (age 18-19), keep them on the payroll for 90 days, then replace with them with a new batch of 18-year olds.  It’s a sweet loophole.  It’s legal.  It’s free enterprise.

My one beef with the DOL is its unwillingness to give credit to the only institutional organization in the history of the U.S. dedicated exclusively to improving the economic lives of working people—i.e., labor unions.  Indeed, you hardly ever see any mention of unions on their website.

While the DOL is clearly pro-worker, pro-disabled, pro-minority, and pro-international rights, they’re terrified of the political backlash that would likely result were they to give a well-earned shout-out to organized labor.  Say again?  Bureaucrats lacking the moral courage to speak the truth to power?  Shocking.

David Macaray, an LA playwright and author (“It’s Never Been Easy:  Essays on Modern Labor” 2nd edition), was a former union rep. Macaray’s article on the history of Major League Baseball’s powerful players’ union appears in the May issue of CounterPunch magazine.  dmacaray@earthlink.net

David Macaray is a playwright and author. His newest book is “Nightshift: 270 Factory Stories.” He can be reached at dmacaray@gmail.com

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