LIVING ON THE BARE MINIMUM

Original Story: latimes.com

There's little room for surprises in James Collins' monthly scramble to manage rent, bills, debts and gas.

The $250 repair bill for his fiancee's engagement ring didn't fit the budget. So he asked the jeweler if he could add the repair cost to his one-year installment plan for the ring. No problem, an employee told him last month.

But when he returned a week later, a manager vetoed that decision — and kept the ring as collateral on the bill.

"I still have this bill, I don't have the ring, and I don't know when I'm going to get the $250 to get it back," Collins said.

Such are the daily trade-offs in one of the nation's most expensive cities with one of the largest shares of working poor. Collins, 42 and a father of two, makes $9.95 an hour, just above the state minimum, as an activities coordinator at a nursing facility in Watts. On the day he needed $250 to repair the ring, he had less than $30 in his checking account.

More than a third of private-sector workers in Los Angeles make less than $13.25 an hour — the new minimum wage proposed by Mayor Eric Garcetti last month. City Council members supporting the bill would like to further boost the floor to $15.25 an hour by 2019.

"More and more companies are moving to the minimum wage as their main worker's wage," Garcetti said. "That has kind of undermined that promise in America that if you work hard, you will be able to support yourself."

The political push to raise wages will be as controversial in L.A. as it is nationally, and researchers continue to squabble over whether and how much it would help low-income workers — or hurt the businesses that employ them. What's clear is that the measure would affect far more people in Los Angeles than in any other city considering a minimum wage hike.

With its huge population, high poverty rate and high cost of living, Los Angeles is among the nation's most impoverished cities. About 567,000 workers in the city earn between $9 an hour and $13.25, according to a study, requested by Garcetti, from UC Berkeley's Institute for Research on Labor and Employment.

They are primarily middle-aged workers supporting families, the Berkeley researchers found, relying on data from the U.S. census and other federal sources.

Contrary to stereotypes of minimum wage workers as teenagers or part-timers, nearly half of those who would be affected are between 30 and 54 years old. More than a third are supporting children. More than two-thirds work full time. Nearly half have taken college course work.

They hail from a wide variety of occupations. Many work in restaurants or retail positions. But others are professionals in healthcare, manufacturing or nonprofit organizations. They are bank tellers, telemarketers, library assistants and zookeepers.

Minimum wage workers often remain in the same jobs for years, with few chances for advancement or raises. They juggle several jobs to keep up with expenses, sacrificing sleep and time with family.

Often, they have no health benefits. If they do, many can't afford to pay for them.

"Right now, minimum wage is not a steppingstone," said Michael Reich, an economics professor at UC Berkeley who has studied the effects of raising the minimum wage. "It's a place where people are stuck for long periods of time."

A $2 raise in two decades

Bartolome Perez has worked at the same McDonald's franchise in South Los Angeles for 21 years. He started as a custodian, became a cook and later moved up to crew trainer. He's back to being a cook.

He started at $4.25 an hour — the minimum wage in 1993 — and now makes $10.75 an hour. After adjusting for inflation, that's a raise of slightly more than $2 an hour over the last two decades.

"Right now in my savings account I have $400," Perez said on a recent evening in a small two-bedroom duplex he rents with his wife, two daughters and a 10-month-old granddaughter. "If I divide that by 21 years, how much have I saved? And is that what a human being deserves, having spent a whole life working for a corporation?"

He said he has never had benefits, unless you count the free turkey a manager gave him one Thanksgiving. He supplements his income by working part-time as a soccer coach for the L.A. Unified School District.

Since last year, he's been active with other fast-food workers who have staged protests pushing for a $15-an-hour minimum wage.

His wife, Vilma, also works for the district as a cafeteria worker. After nearly a decade of part-time work, she was recently upgraded to full-time status. It's the first time she and her husband have had medical benefits in a quarter-century of living in the United States.

The family has gotten by on luck and medicine brought by relatives from El Salvador.

Perez has looked for other jobs through the years in other industries like food packaging. Some paid more; others about the same. He stuck with McDonald's because of the consistency.

"The problem wasn't with the jobs themselves, it was simply that they were not stable," he said. "They were temporary, and bills are not temporary."

The poor leading the poor

Every day, Yvonne Vasquez counsels those who are homeless, unemployed or struggling to get by on low salaries as an intake specialist at the nonprofit Skid Row Development Corp.

She makes $11 an hour and often reflects on how her circumstances aren't so different from those of the people she tries to help.

"If I didn't like the job, I think I'd hate the pay," said Vasquez, 38.

She has three children and lives with a long-term boyfriend in an apartment near Staples Center. "If we would ever break up, I would basically be homeless," she said.

Still, she's skeptical of Garcetti's push for $13.25 an hour. She has health benefits, sick leave and a job that allows her the flexibility to take classes at Los Angeles Trade Technical College.

Vasquez believes prices would go up if employers are forced to raise wages — so would she really get ahead? Smaller businesses and nonprofits like Skid Row Development might have to cut staff.

"Everybody sees the money, but they don't see the issues, the problems that would come with it," she said. "They'd probably hire someone more educated, maybe with a B.A. or master's, pay them three bucks more and let one of us go."

Employed and homeless

Nelson Rice is just entering the workforce at age 19, and already he can't keep up. After leaving home at 18 and training as a certified nursing assistant, he's had trouble finding housing he can afford.

He makes $10.10 working at a nursing home, but he's been homeless for nearly a year, bouncing among several youth shelters. He expects to remain that way until he gets his GED and a license to be a vocational nurse.

Recently, a group of young men saw him in his scrubs on the bus and attacked him, fracturing his jaw. They wanted money, and they assumed, from his medical garb, that he made more, he said.

"I love L.A., but I can't even enjoy the city I was born in," Rice said, struggling to speak with his jaw wired shut. "It's not beneficial to me at all. It just stresses people out trying to make money."

Rice's situation also underscores one of the central challenges of raising the minimum wage within Los Angeles city limits. He works at a nursing home in Lynwood — just southeast of the city limit — meaning he wouldn't benefit from the wage increase unless political leaders there follow Garcetti's lead.

Experts caution that having different minimum wage laws across the 88 cities of Los Angeles County might drive low-skilled jobs out of Los Angeles proper.

"If they can move a mile down the road and cut their wage bills substantially, they will," said Christopher Thornberg, an expert on the California economy who is founding partner of Beacon Economics. "It should be at the state or county level, not at the city level. This may be OK for the county, but it's terrible for the city."

But will they cut my hours?

For many workers, it's not just low wages that cause financial pressure. It's also uncertainty about hours.

Zenaida Torres, 45, earns $9 an hour as a server at a Mexican restaurant in Boyle Heights.

She loves what she does, but feels overworked and exploited. Recently, she and several colleagues accused their employer of wage theft, and the restaurant agreed to pay a settlement.

But Torres said her hours were dramatically cut in retaliation — she's now able to work only on weekends, about 15 hours a week. She fears she'll be fired, and worries about whether she could find a better job.

Her feelings are mixed on a minimum wage increase. If the required pay goes up, employers might hesitate to hire her, she said in Spanish, through a translator. But more income would enable her to move into a larger apartment, allowing her 12-year-old daughter, Angelica, to have her own room.

Currently, the two squeeze into a studio in East Los Angeles. Her paycheck is quickly consumed by basic bills: $700 in rent; a 30-day bus pass; the phone bill. There's nothing left.

"I'm looking for different alternatives — a way to make money independently," she said. "Maybe I'll make crafts, sell food on the street, even sing — anything that can get me an income."

Will she leave me?

Collins, who works at the Watts nursing facility, has lived on a financial precipice for years.

In a recent Friday, he had about $17 left from the check he got a few days before. He needed to spend at least $10 to make it to a once-a-week course he's taking in the San Fernando Valley, 41 miles from where he lives in Long Beach.

He hopes to become certified as a social services designee, which might get him up to $12 an hour.

The gas might last three more days, he said. Then he'd have to borrow from his fiancee or co-workers.

Sometimes he thinks: "How do I hold on to this woman, if she's giving me money for gas?'"

A boost to $13.25, he said, would help. Maybe he wouldn't have to delay paying the insurance one month, and the utilities the next.

He might take his daughters out to eat, or buy health insurance through his employer.

Or get his fiancee's ring out of hock.

"I've come to the realization that I'll probably never have a house, never have a new car," he said. "I just want the security of knowing that I can get a one-bedroom, furnish it, and just pay my bills. I don't think that's too much to ask for out of life right now."

MCDONALD'S RULING IGNITES BUSINESS-LABOR FIRESTORM

Original Story:  USAToday.com

Labor advocates are claiming a big victory after a federal agency said Tuesday that McDonald's central, corporate operations can be lumped in with its thousands of franchises for liability purposes.

The world's largest fast-food chain promises to fight a National Labor Relations Board decision that it says "changes the rules for thousands of small businesses."

"HUGE victory for labor & fast food workers!" tweeted the Service Employees International Union. The union was responding to news as relayed in a The New York Times report that McDonald's corporate apparatus must address workers' complaints that they were fired or disciplined for participating in protests calling for higher wages.

U.S. Chamber of Commerce spokesman Randy Johnson says in a news release the NLRB move "upends existing law and is part of a larger agenda at the NLRB to overturn the joint-employer standard."

Another Chamber exec, Glenn Spencer, calls it "a ploy that could threaten nearly 800,000 franchise businesses and the millions of people who work for them."

The key phrase in the NLRB decision is "joint employer" -- that's the term that the agency's general counsel, Richard Griffin Jr., says can apply to the corporate entity, thus linking it to the franchises. Griffin is a former NLRB board member and served on the board of directors for the AFL-CIO lawyers coordinating committee.

The NLRB has determined that 43 of 181 complaints filed since November 2012 have merit to proceed, the agency says on its website. Of those "43 cases where complaint has been authorized, McDonald's franchisees and/or McDonald's, USA, LLC" -- the central, corporate entity -- "will be named as a respondent if parties are unable to reach settlement."

It is not clear from the NRLB statement how many of the cases involve franchised locations. Sixty-eight cases were found to have no merit, while "64 cases are currently pending investigation," the NLRB says.

Protests over pay at McDonald's have gained traction in recent months. SEIU President Mary Kay Henry was among those arrested in a protest preceding McDonald's shareholders meeting in May. Several McDonald's workers -- among a crowd brought in by 32 buses, police said -- were arrested as well.

The Rev. Dr. William Barber II, head of the NAACP's North Carolina chapter, led the protest march onto McDonald's headquarters campus in Oak Brook, Ill., telling USA TODAY that a "living wage is a moral mandate, and it's time for McDonald's to pay fast-food workers their just due now."

McDonald's has about 3,000 franchises in the U.S., according to the company's website. The company has a total of about 14,000 restaurants in the U.S.

"Wrong" is McDonald's way of describing the decision.

"McDonald's also believes that this decision changes the rules for thousands of small businesses, and goes against decades of established law regarding the franchise model in the United States," says Heather Smedstad, speaking on behalf of the company.

Smedstad, senior vice president over human resources in the U.S., says in a release that the fast-food giant "as well as every other company involved in franchising, relies on these existing rules to run successful businesses as part of a system that every day creates significant employment, entrepreneurial and economic opportunities across the country."

STATES WITH HIGHER MINIMUM WAGE GAIN MORE JOBS

Original Story: Freep.com

WASHINGTON — Maybe a higher minimum wage isn't so bad for job growth after all.

The 13 states that raised their minimum wages at the beginning of this year are adding jobs at a faster pace than those that did not, providing some counter-intuitive fuel to the debate over what impact a higher minimum has on hiring trends.

Many business groups argue that raising the minimum wage discourages job growth by increasing the cost of hiring. A Congressional Budget Office report earlier this year lent some support for that view. It found that a minimum wage of $10.10 an hour, as President Obama supports, could cost 500,000 jobs nationwide.

But the state-by-state hiring data, released Friday by the Labor Department, provides ammunition to those who disagree. Economists who support a higher minimum say the figures are encouraging, though they acknowledge they don't establish a cause and effect. There are many possible reasons hiring might accelerate in a particular state.

"It raises serious questions about the claims that a raise in the minimum wage is a jobs disaster," said John Schmitt, a senior economist at the liberal Center for Economic and Policy Research. The job data "isn't definitive," he added, but is "probably a reasonable first cut at what's going on."

Just last week, Obama cited the better performance by the 13 states in support of his proposal for boosting the minimum wage nationwide.

"When ... you raise the minimum wage, you give a bigger chance to folks who are climbing the ladder, working hard.... And the whole economy does better, including businesses," Obama said in Denver.

In the 13 states that boosted their minimums at the beginning of the year, the number of jobs grew an average of 0.85% from January through June. The average for the other 37 states was 0.61%.

Nine of the 13 states increased their minimum wages automatically in line with inflation: Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington. Four more states -- Connecticut, New Jersey, New York and Rhode Island -- approved legislation mandating the increases.

Twelve of those states have seen job growth this year, while employment in Vermont has been flat. The number of jobs in Florida has risen 1.6% this year, the most of the 13 states with higher minimums. Its minimum rose to $7.93 an hour from $7.79 last year.

Some economists argue that six months of data isn't enough to draw conclusions.

"It's too early to tell," said Stan Veuger, a scholar at the American Enterprise Institute. "These states are very different along all kinds of dimensions."

For example, the number of jobs in North Dakota -- which didn't raise the minimum wage and has prospered because of a boom in oil and gas drilling -- rose 2.8% since the start of this year, the most of any state.

But job growth in the aging industrial state of Ohio was just 0.7% after its minimum rose to $7.95 from $7.85. The federal minimum wage is $7.25.

Veuger, one of the 500 economists who signed a letter in March opposed to an increase in the federal minimum, said the higher wages should over time cause employers to hire fewer workers. They may also replace them with new technologies.

The Congressional Budget Office cited those factors in its February report. But in addition to job losses, the CBO also said a higher minimum could boost paychecks for another 16.5 million workers.

Sylvia Allegretto, an economist at the University of California, Berkeley, said that research comparing counties in states that raised their minimums with neighboring counties in states that did not has found no negative impact on employment.

Restaurants and other low-wage employers may have other ways of offsetting the cost of higher wages, aside from cutting back on hiring, she said. Higher pay can reduce staff turnover and save on hiring and training costs.

State and local governments have become increasingly active on the issue as the federal minimum wage has remained unchanged for five years. Twenty-two states currently have higher minimums than the federal requirement.

And 38 states have considered minimum wage legislation this year, the most on record, according to the National Conference of State Legislatures. At least 16 will boost their minimums starting next year, the NCSL says.

Malasyia Implements Minimum Wage

Story first appeared in The New York Times.

At construction sites, plantations and factories, millions of low-income workers across Malaysia are set to receive a pay raise. Washington DC Labor and Employment Lawyers say that this is a huge step and improvement for the country.

About 3.2 million such workers are expected to benefit from the newly announced introduction of the country’s first minimum wage, part of the government’s plan to transform Malaysia into a high-income nation.

But reactions to the government’s decision to introduce a minimum wage varied Tuesday, with one economist dismissing the move as an election gimmick designed to appeal to workers before voting that many expect could be held as early as next month.

The minimum wage will be set at 900 ringgit per month, or $297, for workers on the Malaysian Peninsula, and 800 ringgit for those in the states of Sabah and Sarawak, on the island of Borneo, Prime Minister Najib Razak said late Monday, in announcing the details of the new legislation.

The lowest-paid will now be guaranteed an income that lifts them out of poverty and helps ensure that they can meet the rising cost of living.

The number of countries and territories in the Asia-Pacific region that have some form of minimum wage has grown in recent years, and now includes Cambodia, Hong Kong, Indonesia, Thailand and Vietnam. In some places, the minimum wage covers all workers, while other places have set minimum wages for specific regions or industries.

The Malaysian government is seeking to transform the country into a high-income nation by 2020, which would require the average annual income to rise to the equivalent of $15,000. Last month the per capita income had increased to $9,700 a year, up from $6,700 two years ago.

Most companies will be required to begin paying the minimum wage in six months, although companies with five workers or fewer will be given 12 months to comply.

Foreign workers will be entitled to the minimum wage, but it will not cover workers in the domestic sector, like maids and gardeners.

The union had been calling for a minimum wage for more than a decade. While the union initially asked for the minimum wage to be set at 1,200 ringgit a month, he said it had later revised its demand to 900 ringgit in an attempt to reach a compromise with the government and employers.

However, the opposition Socialist Party of Malaysia had called for a minimum wage of 1,500 ringgit a month. The party, which held a rally in Kuala Lumpur on Tuesday, criticized the government for not introducing the new rates immediately and said in a statement that it was discriminatory that there would be different rates for workers in different parts of the country.

The prime minister has said that the different rates were a reflection of regional variations in salaries and cost of living, according to news reports.

Employer groups say that paying the minimum wage would reduce companies’ profit margins and that some companies with five or fewer employees could be forced out of business.

It’s a big challenge is because the new rates are not really premised on increases in productivity or performance. This is a cost factor that has to be borne by employers, which eventually will affect their competitiveness.

Some companies might have to increase wages by as much as 100 percent. For instance, he said, some plantation workers in Sabah are currently paid about 400 ringgit a month, but that would increase to 800 ringgit under the new wage structure.

A professor in the economics faculty at the University of Malaya, said the introduction of a minimum wage could increase the cost of exports if companies passed the extra cost onto their customers.

The 900-ringgit monthly wage would be more significant for workers in rural areas than those in urban centers like Kuala Lumpur, where the cost of living has risen steeply in recent years. He added that in Malaysia, the rural vote is what puts the government in power.

There has been much speculation that a national election could be held in June, although the government has until April 2013 to hold the vote.

It was recently announced that civil servants would receive a pay raise and gave families earning less than 3,000 ringgit a month a one-time payment of 500 ringgit, a move expected to benefit four million households.


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