Thursday, September 07, 2006

Senate Dems Propose State Minimum Wage Increase

Indiana Senate Democrats are proposing an increase in the state's minimum wage over two years from $5.15 an hour to $7.25 an hour. The current rate is the same as the federal minimum wage law, which has not been adjusted since 1997. Interestingly, Sen. Tim Lanane (D-Anderson) points to studies claiming that states which have set their rates higher than the federal rate have done a better job with small business development. The Star's Mary Beth Schneider, quoting Lanane, reports:

He said a recent study by the Fiscal Policy Institute of New York found that states with minimum wages that exceeded the federal level had stronger small business growth than those states whose wage matched the federal level. He noted that Illinois has a minimum wage of $6.50 an hour, and is discussing raising that again. Michigan, with a minimum wage of $6.95 an hour has already decided to raise that to $7.40 by July 2008.

Schneider's report doesn't indicate other changes the Senate Democrats are proposing, but I must assume they are proposing to change the applicability of the law as well. Indiana's minimum wage applies only to those employers who employ 2 or more employees and are not covered by the federal Fair Labor Standards Act (FLSA). FLSA applies to any employer who is engaged in interstate commerce, or who does at least $500,000 a year in business. Very few Indiana employees are actually covered by the state's minimum wage law, so if the higher proposed rate is to impact all workers, the coverage of the state law would need to be expanded as it has been in other states.

Polling data seems to indicate that this is a popular issue with voters this year. CNN referenced a poll this afternoon which showed higher support among voters for a minimum wage increase than just about any other issue it polled on. GOP members of Congress have really missed a golden opportunity to score big with working class voters by pushing through a minimum wage increase before this year's election. They have offered to raise the minimum wage, but only as tradeoff for permanent elimination of the inheritance tax and extension of certain tax breaks for businesses. It will have been a decade since the rate was last increased, and, as Lanane points out, the cost of basics have risen substantially since then. Gas prices and the cost of a loaf of bread, for example, have both doubled over the past decade.

While we're on the topic of labor, has anyone checked out the Department of Labor's site recently? As an employment lawyer, I used to be able to find a lot of useful information beneficial to employees, particularly with respect to wage dispute matters. The new admininstration has obliterated any information from its site that could be used by employees to understand their basic rights concerning the payment of their wages. The current site is completely useless--perhaps one of the worst in the nation. I can't help but think this was a deliberate decision to appease the business community, which doesn't want the Department of Labor assisting employees when their employers screw them out of their wages. The Department is statutorily required to enforce collection of unpaid wages of less than $800, or instruct the employee on his rights to pursue a civil remedy under Indiana law. By removing all information about this enforcement process from their site, including a complaint form, the agency is obviously hoping to keep Indiana employees in the dark. What a disgrace.


lori said...

Great post Gary, it is way past time to raise minimum wage. I'm a small business owner and I believe minimum wage should raise continually with living costs. Unbelievable that they have removed that information. Pathetic.

Anonymous said...

You are right about the DOL site. The info was removed months ago.

Who are you surprised? DOL was a prime target of the MMM crowd when they took office.

indyernie said...

Raising the minimum wage will only force the cost of living higher

Anonymous said...

indyernie, here's a brief lesson from Economics 101:

You're nuts.