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State Legislatures Grapple With Minimum Wage and Related Issues

© Krantz News Service / Contexture AI
April 10, 2018


  

The minimum wage varies widely among states, and lawmaking on the issue also reflects significant regional and political diversity. Common themes appear in legislation as political movements coalesce across the country and drafters embrace language from other jurisdictions.

Among scores of state bills over the past year containing provisions to raise the basic minimum wage, only one became law -- and that was a massive Rhode Island budget appropriation bill containing two sentences at the bottom upping the minimum wage to $10.10 in 2018 and $10.50 in 2019. But legislatures looked at several key issues beyond the basic level of the minimum wage.

In 21 states the effective rate of the minimum wage equals the federal rate. Of the remaining states, 11 (plus the District of Columbia) have scheduled automatic increases over time, indexed to inflation either now or at some point in the future.

The following analysis derives its conclusions from research coordinated with Contexture AI. Quantitative analysis of bill texts by a Contexture algorithm finds patterns across jurisdictions through the application of text mining and machine learning.

Contexture's cluster analysis scores the orbital proximity to the minimum wage of bills addressing similar issues. One example is a Nevada bill dealing with the prevailing wage. Under Nevada law payment for certain contracts entered into by school districts and the Nevada System of Higher Education are to be set at 90 percent of the prevailing wage rate. That means that if the prevailing wage for a certain task is determined to be $9.17, such contracts may set the rate of payment at $8.25, which is Nevada's minimum wage. HB 154 in the 2017 session removed that exception, therefore requiring school districts and the Nevada System of Higher Education to pay the full prevailing wage. The Democratic legislature passed the measure, but Republican Gov. Brian Sandoval vetoed it, having signed a bill in the previous legislature that created this exception in the first place.

Another cluster in the Contexture analysis focuses on certain employment compensation to a qualified disabled employee, as illustrated in California AB 3127. The measure provides an income tax credit for payment of a wage to an individual with a disability who may be paid a special minimum wage under state or federal law. The credit would equal the difference between the special minimum wage and the minimum wage, multiplied by the hours worked by the qualified employee. The bill is in the California Assembly's Committee on Revenue and Taxation.

Minimum wage legislation can range from the mundane -- such as an incremental increase to a basic level of payment for any kind of work -- to the complex -- such as the byzantine regime for tipped workers, a category with the widest range of difference among jurisdictions.

And as always, lawmakers can end confusion with clarifying legislation, as Congress has done for one aspect of tipped worker compensation. In language inserted in the Consolidated Appropriations Act, 2018, Congress banned employers from "pooling" tips to employees; employers favored the practice to spread tips around to all staff, not just those receiving the tips, but employees argued that the premise of fair distribution to "back-of-house" employees was an excuse for employers to take money the tipped workers had earned. Congress sided with employees, and President Trump signed the bill.

For more than 50 years there has been a separate federal minimum wage for tipped workers. It is now $2.13 per hour, and employers must make up the difference from the federal minimum wage ($7.25) if the employee's tips do not make up any shortfall. Seven states have eliminated the separate minimum wage category for tipped workers, and more legislation proposes doing so.

New York has considered eliminating the tipped wage credit, and Maine has restored it at the urging of the restaurant industry after Maine voters had voted to eliminate it.

Many states tie boosts in the minimum wage to increases in the Consumer Price Index (CPI). But the increases depend upon the method a state chooses for calculating the rate of inflation.

A standard measure for the CPI is the CPI-U (the Consumer Price Index for All Urban Consumers). Another measure is the CPI-W, which is the Consumer Price Index for Urban Wage Earners and Clerical Workers (the measure for Social Security cost-of-living adjustments). This method is generally seen as providing for a slightly higher adjustment than the CPI-U. Yet another measure, the Chained CPI-U, or C-CPI-U, is considered to provide a slightly lower adjustment than the CPI-U.

For comparison of the different indexing models, in 2021 the minimum wage increase will be measured by the CPI in Colorado, the CPI-U in Arizona, and the CPI-W in Washington.

As the accompanying summary of legislative developments describes, the minimum wage varies widely among the states, although common themes do appear across jurisdictions.

The graphic is a portrayal of conclusions derived from an algorithm created by Contexture AI and shared with LegiCrawler to coordinate research findings. Quantitative analysis of bill texts by the Contexture algorithm finds patterns across jurisdictions through the application of text mining and machine learning. The algorithm places the bills into clusters for further analysis and then scores the orbital proximity to the minimum wage of bills addressing similar issues.

In a cluster analyzing the category of tipped workers, the algorithm found that related issues scoring closest were the cost of living adjustments, living wage, and the Consumer Price Index, in that order.

In a cluster of exceptions to the minimum wage, living wage, overtime compensation and garnishment scored closest.

In a cluster of issues that added to the minimum wage, collective bargaining agreements and prevailing wage measures scored closest.

In a cluster about unions, bargaining issues, unfair labor practices, overtime compensation, collective bargaining agreement, and bargaining unit scored closest.

In a cluster analyzing circumstances where a subminimum wage is authorized, cost of living adjustments, growth, undue hardship, overtime compensation, strike, training wage, and the Consumer Price Index scored closest.

In the category of preemption, the algorithm scored collective bargaining agreements, sick leave, tip (as in tipped workers), dollar amount, cost of living adjustments and the Consumer Price Index as closest.

In a cluster analyzing tax issues, the closest issues were misconduct, allow, Social Security, tract, credit, qualify and taxpayer.

In a cluster analyzing equal pay, the closest issues were pension, task, profit sharing, collective bargaining, wage theft, lien, tipped worker, and independent contractor.

In the category of predictive scheduling, automobiles, wrongful termination, schedule, shift, overtime compensation, on call, and shift scheduling were the top categories.

In the area of government subsidies to employers to pay for the minimum wage, the closest issues were invest, lay off, grant, fringe benefit, and fund.



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