By Andrew Khitsun
A few months ago we had another wage increase. This stands in stark contrast with the population at large – increasingly union-less and without any rights at work. The wages are shrinking, and benefits disappearing. All the while the unions are demonized by the powers that be – whether corporations, extremist politicians or TV talking heads.
Today, I want to remind you how, as a part of the American Dream, unions helped to shore up the wages for workers at the very bottom of the pay scale.
The history of Minimum Wage and Living Wage are intertwined and inseparable. The first known wage regulation was actually not a minimum wage but a maximum (ceiling) wage instituted in Medieval Europe, when the Black Plague severely decimated the population, and labor came at very high price, so laws were passed establishing penalties for paying above set rates.
In the following centuries, there were attempts to tie the wages to the price of food (since iPhones didn’t exist, food was considered the one and only necessity), basically establishing a living wage. Various countries instituted different ceilings and bottom wages through the centuries, until the arrival of capitalism, which caused the repeal of most of the existing laws and an essential “free for all” when it comes to paying for labor.
Naturally, pay was minuscule and working conditions terrible. This started to change in the second part of the 19th century, with the rise of unions and the appearance on the scene of “collective agreements” that unions negotiated with employers. Their wages set the pace for other, similar but non-unionized companies, to raise wages too in order to attract the best talent (and to prevent their workers from unionizing: the argument “why do you need a Union when I am paying you well?” is still being used today.)
The minimum wage movement was trying to address then-common sweatshops, where workers (usually women and children) were paid substandard wages.
The first legislative attempts to establish a minimum wage are attributed to New Zealand and Australia back in the 1890s. On the other hand, some countries in the developed world (for example Sweden or Denmark) don’t have a minimum wage to this day, relying exclusively on unions to set the salary plank through collective bargaining.
Early attempts by labor unions in America to create a mandatory minimum wage were ruled unconstitutional by the U.S. Supreme Court on the grounds that they “restricted the worker’s right to set the price for his own labor.” This allowed employers to continue exploiting their workers through the Great Depression of the 1930s, when incredible demand for jobs caused wages to drop even further to an all-time low. With poverty becoming a huge national issue, President Franklin D. Roosevelt promised to constitutionally protect American workers as a key part of his 1936 re-election campaign. He won by a landslide.
The Fair Labor Standards Act of 1938 established a federal minimum wage to serve as “a floor below wages,” to reduce poverty and to ensure that people at least could buy the bare necessities while working and producing wealth for others.
Today, minimum wage is far below its historical level and loses value every year due to inflation. In fact, if the federal minimum wage kept up with inflation it would be $10.75 an hour, not the $7.25 it is today. By another measure, if minimum wage had kept pace with workers’ productivity since 1968, the inflation-adjusted minimum wage would be $18.67.
Some of the first Living Wage campaigns in the United States were launched in the 1990s, addressing the issue of minimum wage having fallen too far behind the actual living costs, resulting in increasing poverty among the population.
Unions were joined in these endeavors by student groups, community coalitions and other progressive organizations. Living Wage campaigns flared up in places like New York City (one of the most expensive cities in the world), Harvard University, Miami University (driven by AFSCME and the Miami University Fair labor Coalition), John Hopkins University (organized by SLAC – Student Labor Action Committee), Swarthmore College (Living Wage and Democracy Campaign), and the University of Virginia.
The movement is continuing now, with fast food workers – some of the lowest paid workers in America – joining the fray with “Fight for $15” and “15 Now” campaigns.
While many letter carriers in big cities (like New York) qualified for food stamps before 1970, we’ve come a long way since then – all because we have the NALC.
Andrew Khitsun is President of Capital City Merged Branch 507, National Association of Letter Carriers.
Union Labor News April 2015
Let’s say your company is downsizing, or just wants to escape Wisconsin’s increasingly nasty employment environment by moving to Minnesota and you get laid off. You should be OK for a while because Wisconsin has a safety net for that, right? It’s called Unemployment Compensation. It’s been in place for many years and has helped thousands of workers stay afloat in that transition period between jobs.
All of that is about to become more difficult, with fines and even jail time awaiting you if you make a mistake during what is likely a very turbulent time in your life.
In his Budget bill, Governor Walker has proposed three main changes to the law: new drug testing requirements, increased concealment penalties, and job search changes.
This issue is caught in a tug of war between the federal government and the states. Governors such as Walker want to use the opportunity of your temporary unemployment (through no fault of your own) to intrude on your personal life and make you pee into a cup to test for drugs.
The Obama Administration doesn’t view unemployment as a punishable offense and appears to be drawing the lines quite narrowly as to which occupations will be liable for drug testing. It used to be illegal to drug test people as a condition for unemployment compensation, but the law was changed in 2012 to let states test people in federally-designated occupations where on-the-job testing is common.
The Feds have yet to designate these occupations, however, and no testing on this front will occur until the Feds act.
But, Walker also wants to force employers who presently drug test applicants to turn over those test results to the Department of Workforce Development (DWD), so that DWD can require those applicants to start drug treatment programs if they do not contest the test results. Those who don’t take a test will be considered to have tested positive. And, employers will be dragged into unemployment hearings for applicants who contest these drug tests.
Finally, Walker wants to expand drug testing beyond federally-designated occupations to state-designated occupations. The criteria for identifying these occupations is unknown. But, given Walker’s divide and conquer politics, it would not be surprising for the state to designate all public school teachers for drug testing while excluding private and charter school teachers. In so doing he would force an additional expense on local school districts to cover.
Here’s where you could face some jail time—even if you think you did everything right. What is concealment? Concealment consists of a suppression of a fact and implies a purpose and design. A forfeiture of benefits may not be imposed against a claimant who makes an honest mistake, but only against one who engages in a willful act of concealment, not due to ignorance or lack of knowledge.
The problem is that DWD is now routinely charging the unemployed with concealment when they simply make mistakes on their claims. For DWD, any failure to disclose wages or other unemployment-related fact is automatically concealment, and it is up to the claimant then to prove a mistake was only innocent error. The Labor and Industry Review Commission has been holding the line on this broad application of concealment and requiring DWD to show that a mistake on a claim was actually intentional.
The stakes for charging concealment are high. Besides paying back all unemployment benefits that have been received, you will also owe a 15% administrative penalty and possibly a criminal penalty. The current penalty is a fine of $100-500 and/or 90 days in the pokey.
The governor proposes increasing the administrative penalty to 40% and increasing criminal fees and jail time to nine months in jail plus up to $10,000 in penalties. (The highest penalties go to those whose “concealment” exceeds $10,000). Keep in mind, you are supposed to pay these excessive penalties at a time when you’re unemployed.
Victor Forberger, an attorney who often helps workers and employers with unemployment claims, cited numerous recent cases where mere mistakes were being treated as fraud. “The Commission has been overturning some of those decisions,” he said, “but the Commission can only act on cases that reach it.” He described one case where a person made mistakes when filing her claim on the computer because she is not good with computers. After each mistake, she called DWD to correct the error. Even though she informed DWD of the errors, DWD still charged her with concealment and an administrative law judge affirmed the concealment charges after a hearing. Not until she appealed to the Commission did she finally get someone to note that her mistake could NOT have been an intentional act to steal unemployment benefits since she notified the Department about the mistake in the first place.
Let’s say you are unlucky enough to be unemployed for a long period of time. Forberger said that even small errors can multiply quickly, reaching the $10,000 mark because processing time at DWD is often quite slow to act and mistakes aren’t caught right away. Under Walker’s new budget, your penalty would increase from $1,500 to $4,000—and that’s just for the administrative fees.
In the last quarter of 2014, 110,614 initial claims were filed for unemployment benefits. Not all of these folks were determined eligible for benefits, especially since there are a host of new ways to disqualify folks. Each year the Department pursues about 14,000 concealment cases. How many of those people are going to clog up our already overfilled prisons? How many of them will be there because of innocent mistakes, bad advice, or misunderstandings?
Job search changes
You say you’ve been a welder for 14 years? How about running the French fry machine at McDonald’s part time? Current law says for the first six weeks you can be pretty choosy about staying in your field, but you may have to branch out after that, with a certain level of undefined “reasonableness” being the standard. The proposed system would require broadening the definition of “suitable work” in a kind of systemic manner that currently does not exist.
Forberger argues that such a system may not even be possible because it would be too complicated given individual work histories and training, geography, and time.
Taken as a whole, the changes reek of punishment, cruelty and disdain for workers.
To follow developments in unemployment law, look to the blog http://wisconsinui.wordpress.com/.
Thanks to Victor Forberger for his help with this article. Union Labor News is published by the South Central Federation of Labor, Madison, Wisconsin
Fitchburg City Council
• City Council District 1, Seat 1: Dorothy Krause (I)
• City Council District 1, Seat 2: Michael Childers
• City Council District 2, Seat 4: Patrick Stern (I)
Madison Mayor: Paul Soglin (I)
Madison Common Council
• Common Council District 1: Matt Brink
• Common Council District 2: Ledell Zellers (I)
• Common Council District 3: Amanda M.-M. Hall
• Common Council District 4: Michael Verveer (I)
• Common Council District 5: Shiva Bidar-Sielaff (I)
• Common Council District 6: Marsha Rummel (I)
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Stoughton City Council
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Sun Prairie City Council
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Verona City Council
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Stoughton School Board (3 at-large seats)
• Alison Sorg
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• Marta Hansen
• Mike Krachey (I)
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Wisconsin Heights School Board (3 at-large seats)
• James Schroeder
• Madison Metropolitan School District Building Referendum (Vote Yes)
Columbia & Dodge County
Fall River School Board (2 at-large seats)
• Jason Freedman
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• Sue Johnsrud
Beaver Dam Common Council
• District 3: John S. Abfall
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Mayville City Council
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Horicon School Board
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• Mayville School District Question 1, Building Referendum (Vote Yes)
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Monroe City Council
• District 8: Dustan Beutel
Monticello Village Board (3 at-large seats)
• Trustee: Greg Bettin
Monroe School Board (3 at-large seats)
• Nicole Saugstad
Fort Atkinson City Council (At-large seat)
• Mason T. Becker
Jefferson City Council (At-large seat)
• Peg M. Beyer
Cambridge School Board (2 at-large seats)
• Margaret Sullivan (I)
• Tomas E. Wright
Fort Atkinson School Board (2 at-large seats)
• At-Large: Cynthia Harrington-Ficenec
• At-Large: Kim Patrick
Jefferson School Board
• Area IV: Terri Wenkman (I)
Lake Mills School Board (2 at-large seats)
• Donna D. Thomas (I)
• Rachel Roglitz-Davies
Whitewater School Board (2 at-large seats)
• Kelly Davis
Westfield School Board
• Representing Coloma, Colburn, Richfield, Richford: Oscar Miller
• Representing Crystal Lake, Newton: Karen Alexander
• Montello School District: Vote Yes
Richland Center City Council
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• District 3: Marsha Machotka (I)
• District 4, 2-year term: Bill Kloehn
Reedsburg School Board
• Beth Voigt
• Sauk County Referendum on Weston School District: Vote Yes