GOP House Minimum Wage Bill Attacks Worker Tips, States Rights

Most workers are covered by two minimum wage laws, the federal law and their state law. The minimum wage that applies is the higher of the two. (The exception is the small number of workers whose employer is not engaged in interstate commerce). Twenty-three states (and D.C.) have enacted minimum wages that are higher than the federal minimum wage.

A special case involves tips. Both the federal minimum wage and most state minimum wages allow employers to reduce the wages of workers who receive tips so that the total of wages and tips are equal to the minimum wage. Seven states do not reduce the minimum wage by the amount of tips. That is, for the state minimum, the tips are on top of the minimum.

The federal minimum wage is now $5.15/hr. California, for example, has a minimum wage of $6.75/hr. and does not reduce that minimum for tips. So a waitress in California must receive an hourly wage of $6.75 plus tips she receives.

The House passed a bill (H. R. 5970, now before the Senate) that increases the minimum wage from $5.15 to $7.25 per hour. However, a provision in that bill, Sec. 402, called Tipped Wage Fairness, will force states such as California to reduce the states minimum wage by the amount of the tips received. This section of the act would take effect immediately, even though the federal minimum wage will not take effect until January 1, 2007 and will not be higher than the California minimum wage until June 1, 2009. After June 1, 2009, a waitress in California may be paid less than she is now paid.

This provision, to actually reduce the pay of some minimum wage employees was supported by the National Restaurant Association and other business groups. It was passed in the House with Republican support. These are the same people who support "states rights", the ability of states to make their own laws. In this case, they want the federal government to override the state governments.

More:
Harold Meyerson Op Ed Column in the Washington Post

Tips at Issue in Minimum Wage Bill, Erica Werner (AP) Washington Post, 8/2/06

An Estate Tax Twist Reverses Party Roles On Minimum Wage, Jeffrey Birnmaum, Washington Post, 8/3/06

Stopping Misuse of Social Security Numbers

There have been too many recent reports of Social Security numbers being stolen and possibility falling into the hands of identity thieves. While most of the Social Security numbers that have been stolen have not been used by identity thieves to open fraudulent accounts, that possibility is present.

(see Washington Post story 7/12/06)

Given the number of people who have access to our Social Security numbers, there is always the possibility that someone will gain access to the number and use it fraudulently. I doubt if it is really possible to completely protect the numbers if they can be used by criminals to open accounts and borrow money in other people's names.

The Social Security number was originally intended to be an identification used to keep social security accounts and income tax accounts. It was to be the same as a name, only without duplications. However, the social security number has become an identifier for many purposes, including credit reporting and credit accounts. Some businesses even use the social security number as a form of a password--if you know a person’s “social” you must be that person.

Attempts to keep fraudsters from learning of people's Social Security number are probably futile. The number of cases of fraudulent uses may be reduced, but not eliminated.

Apparently it is now possible to apply for and receive a credit card account on-line or by phone with only a name, address, and Social Security number. With the SSN and other publicly available information one person can obtain credit in another person’s name. The victim is then left with a bad credit record and difficulty obtaining loans or even jobs.

Perhaps a better approach would be to eliminate the use of the Social Security number as a confidential identifier for credit applications. If this is done, there would not be a need to keep the SSN confidential. We could carry social security cards in our billfolds, and we could stop worrying about theft of the numbers.

A credit application may still require the SSN to allow the credit of the applicant to be checked, but it would be no different from the applicant's name, address, phone number, and other non-confidential information. There should be no assumption that knowledge of this number is proof that a person is the person he says he is.

If a credit granter wanted to protect against fraudsters pretending to be other persons, then he could keep photographs, fingerprints, or even DNA to assist in the arrest of the applicant if the application later turned out to be fraudulent.

If a lender is liable to the victim for the cost resulting from credit card fraud, certainly the lender will be more careful to be sure that a borrower is who he says he is.

Priorities of Congress Revealed by Penalty Limits

Two items, when taken together, show the priorities of the present Congress. As noted in the blog Confined Spaces, Congress passed two increases of fines that may be levied by regulatory agencies.

In a reaction to the recent mine accidents that have killed 33 coal miners this year, Congress increased the maximum civil penalty for violations of safety regulations from $60,000 to $220,000.

Responding to Janet Jackson’s 2004 "wardrobe malfunction" at the Super Bowl and other incidences, Congress increased the maximum fine that the FCC may impose for indecent conduct from $32,500 to $325,000.

So a mine safety violation that may kill minors is now worth less that a breast exposure.

New York Times articles on the mine safety fine increase and on the indecent conduct fine increase.

State Secrets Doctrine

An article in the on-line magazine Slate by Henry Lanman reports that the US Government has used the concept of state secrets to shield the government from law suits.

Lanman discusses the federal government's use of the doctrine of state secrets to shield itself from embarassment, examining the case of Khalid el-Masri, a German citizen who apparently was grabbed under "extraordinary rendition", held for months, and released only after the government decided they had the wrong guy. Mr. el-Masri's suit was dismissed under the state secrets doctrine.

See also this article in the Washington Post.

Other blogs:
Out of the Jungle: State Secrets Doctrine

Political Animal: State Secrets Revisited

Is Bush Preparing for War in Iran?

According to a story in the Washington Post today (Sunday, April 9), the administration is considering its options for military strikes against Iran. This is all part of "coercive diplomacy", pressure on Iran to abandon any nuclear development programs they may have.

According to the Post, no attacks appear likely in the short term. There are also doubts about whether military methods would be effective against Iran's alleged nuclear weapons program. But, according to the Washington Post, "administration officials are preparing for it as a possible option and using the threat 'to convince them this is more and more serious,' as a senior official put it."

The possibility that Iran may develop nuclear weapons, particularly small weapons that could be sold to terrorist organizations and smuggled into the US is serious. Deterring Iran by being prepared for military action may be a useful strategy. However, with our military stretched to the limit by the war in Iraq, and with the growing opposition to Bush’s war, it is not likely that the president could obtain permission of Congress or support of the American people to strike Iran.

One of the consequences of the Iraq war is that our ability to pressure other countries with the threat of military action is greatly diminished, or eliminated.

Congress May Eliminate State Privacy Protection Rules

The Congress is at it again. In a previous post I pointed out that a bill had passed the U. S. House of Representatives that would preempt, or override, state regulations on feed safety that were more restrictive than Federal law.

Now a bill has been adopted by the House Financial Services Committee that would eliminate many state laws that allow consumers to place a freeze on their credit records to prevent unauthorized access.

The bill, H.R. 3997, introduced by Rep. Steven LaTourette (R-Ohio) would eliminate state laws that are stricter than the federal law on consumer notification on security breeches and allowing consumers to freeze their credit files.

According to critics Susanna Montezemolo of Consumers Union and Ed Mierzwinski of US PIRG, eleven states have stricter notification standards than the federal bill, and eight states have freeze laws stronger than those in the bill: California, Colorado, Connecticut, Louisiana, Maine, Nevada, New Jersey, and North Carolina. All of these laws would be eliminated under the measure.

Chertoff and Chemical Plant Security

An editorial in today’s New York Times criticized Michael Chertoff, Secretary of Homeland Security, for his lack of leadership in the area of chemical plant security. Chemical plants are one of the ways terrorists can attack the U. S. For example, an attack on a chlorine plant, releasing significant amounts of poison gas, could endanger thousands.

OSHA has regulations designed to reduce the chance of an accidental release of hazardous chemicals or of an explosion. However, these regulations are designed to protect against accidents, not deliberate acts. Many chemical plants have security plans and methods to protect against deliberate acts that would endanger the public. However, many plants do not have such protections, and the federal government has been slow to issue regulations to require them.

In a speech to leaders of the chemical industry, Mr. Chertoff supported the concept of federal preemption of state regulations of chemical plants if the federal regulations were weaker.

According to the New York Times, "Mr. Chertoff seemed perfectly content to defer on key security matters to an industry that contributes heavily to Republican campaigns but has proved to be dangerously unwilling to take public safety seriously."

Senators Susan Collins and Joseph Lieberman, a Republican and a Democrat, have introduced a bill that would require the Department of Homeland Security to develop safety standards that would be mandatory for all chemical plants. This legislation is needed. But action will still be required by Homeland Security to write and enforce the regulations.

Corporate Offenders Not Paying Fines

The government regulatory agencies enforce regulations by imposing fines on those who violate the regulations. This ability to fine violators puts teeth into the rules.

Therefore if the violators can escape the fines, the regulations have no teeth. According to an Associate Press story in the Washington Post Sunday, corporations are stiffing the government on fines. Some examples: A $3 million fine to a pipeline company after a deadly fire was reduced by 92 percent. Coal firms were charged more than $1.3 million for deadly violations. The penalties are largely unpaid.

According to the AP, criminals and civil offenders owe the government more than $35 billion in fines, based on Justice Department figures, more than five times the amount owed a decade ago. This is enough to cover the annual budget of the Department of Homeland Security.

The ability to impose penalties is the heart of the ability of the government to protect workers and other citizens. When the government does not effectively collect the money owed, it is not only cheating taxpayers but is giving up its ability to protect us.

U. S. House Passes Bill to Prevent States from Regulating Food Safety Labels

Usually Republicans support the concept of Federalism, the reliance of states to make decisions about the welfare of their residents. Sometimes known as "states rights", the idea is that individual states should make their own rules based on the preferences of their citizens rather than rely on the Federal government.

That is, unless the Republicans in Congress don’t like the actions states are taking.

A bill passed by the U. S. House of Representatives, H.R. 4167, introduced by Rep. Mike Rogers (R-Michigan) would "preempt", or overrule, all state regulations about food safety, including labeling requirements to warn consumers of about dangers to the food supply, including carcinogenic and toxic substances in food.

The bill passed the House on Wednesday on a largely party line vote (92% of Republicans, 35% of Democrats voting for the bill)

Not only does Congressman Rogers want to limit the federal government’s food safety labeling regulations, he does not want any state to require food safety warnings not approved by the federal government.

bill
Story in Washington Post

AT&T, BellSouth Tout Competition and then Announce Merger

On March 1, 2006, both AT&T and BellSouth submitted their comments to the FCC's rulemaking proceeding concerning consumer protection for broadband customers. As in the earlier round of comments, both companies opposed broadband consumer protection regulations because, they said, the competition would prevent any need for the protection. (I submitted comments on the same day in favor of consumer protection regulations).

AT&T commented that "In light of this robust, head-to-head competition, the Commission should stand firmly by its well-established policy of letting 'the marketplace, not the government, pick the winners and losers among new services.'"

BellSouth commented that "The BIA [Broadband Internet Access] services market is competitive; it adequately protects consumers from the concerns contemplated in the Notice [Notice of Proposed Rulemaking]".

Four days after the two companies told the FCC about robust competition, they announced their intent to merge. This merger would create a massive telecommunications company that would supply long distance, local telephone, cell phone, and broadband wireless (DSL) service. Cingular Wireless, which will be part of the new company, had recently acquired the wireless business of AT&T.

Not only will the new company be the largest provider of broadband Internet service and the largest cell phone carrier, it will provide nearly half of all telephone lines.

Will we still have "robust, head-to-head competition"?

Even the NRA Supports Speech Regulation

Those who oppose regulation often forget (or ignore) the fact that a large amount of regulation is supported by (often requested by) business groups and other groups generally "anti-regulation".

The National Rifle Association usually opposes regulations concerning firearms. The NRA claims to support free speech, opposing campaign finance regulations that would limit their advertising and support for politicians that take their views.

But how strong is the NRA's opposition to statutory limits on speech? The NRA supports a Virginia bill that would prevent a doctor or other health professional from asking a patient about firearms except in the case of a gun injury or if the patient asks the professional about gun safety. For example, a pediatrician might want to remind parents to keep firearms locked up around children. A mental health professional interviewing a young person who had shown signs of possible violent behavior if the young person had access to guns or used guns.

If you don’t like for your doctor to ask about gun safety, why can’t you just either refuse to answer or find another doctor. Isn’t a “speech code” for health professionals just as much a restriction on freedom of speech as campaign finance regulations”

Is this restriction on doctor-patient communications necessary for the public health and safety?

The Volokh Conspiracy has more.

Does Competition Prevent the Need for Regulation?

One of the objections to regulation is that free market competition prevents the need for regulation. In some cases, this may be true. In a monopoly market, such as electric, gas, cable, and telephone service when there is only one provider for a service, the government not only selects the company that is allowed to provide the service but sets the rates for the service. For example, only one company strings power lines down the street in any particular area. We don’t want multiple power lines in our neighborhoods. Because this is a monopoly, the government (in most cases, states) set the rates that can be charged.

But what about regulations concerning consumer protection when there is competition. The Federal Communications Commission is now proposing regulations that, among other things, would protect certain consumer information that broadband internet services (such as cable companies) obtain from customers. In opposing the regulations, Time Warner, owner of AOL and provider of Road Runner broadband access in many areas, claims that privacy protection regulation is unnecessary due to competition.

According to Time Warner, in their comments to the FCC:

Broadband service providers currently operate in a marketplace in which consumers expect providers to make their privacy policies available on their websites. In fact, some ISPs compete on the basis of their privacy policies, and experience has shown that ISPs that fail to protect their customers’ privacy risk incurring their wrath and driving them to an alternative provider that takes privacy more seriously.

Time Warner seems to be saying that when we select a broadband internet service (usually a choice between the cable company and the phone company’s DSL service) we look at the privacy policy and decide which service we want based, in part, on those privacy statements.

I looked for Time Warner’s privacy statement. It is found at a small link on the bottom of their home page (www.rr.com, linking to content.rr.com/rr-privacy) that leads to a statement of approximately 3000 words. By scrolling more than half way down the page you find the statement "Unless you object, the Cable Act also permits Cable Operators to disclose personally identifiable information to others, such as advertisers and direct mail or telemarketers, for non-cable related purposes." (emphasis added).

Is this an example of competition making regulation unnecessary?

Bush Appoints Foxes to Guard Hen House

Two of the most important agencies that protect worker safety and health are the Occupational Safety and Health Administration (OSHA) and the Mine Safety and Health Administration (MSHA). President Bush has appointed industry insiders to head both.

Richard Stickler, with 30 years of work in the mine industry but little experience in mine health and safety.

As stated in an editorial in the Charleston (W.Va) Gazette, "Despite widespread belief that more communication equipment and better safety enforcement might have saved at least 11 of those men, Stickler told U.S. senators that current mine safety laws are 'adequate'. A day later, two more miners died in separate incidents in Boone County."

According to AFL-CIO President John Sweeney "His only experience with public enforcement of health and safety standards was marked by repeated attempts to limit regulations and reduce health and safety for miners in Pennsylvania".

Edwin Foulke is Bush's nominee to head OSHA. Foulke has been the Workplace Safety practice area coordinator at the law firm Jackson Lewis. This group, according to its web site, has "the expertise to contest citations before the Occupational Safety and Health Review Commission".

Bush Fighting Regulations in the Public Interest

There are many people, particularly conservatives and business interests, who seem to abhor all regulation (but conveniently ignoring regulations that benefit them). Regulations that protect consumers, workers, and the environment are high on the hit lists of businesses and conservative politicians.

Examples are common today. The president suspended, until opposition arose, worker wage protection regulations for the Katrina recovery work on the Gulf coast, as if it would be easier to hire workers if companies paid a lower wage. The administration weakened mine safety enforcement, and recent stories from West Virginia tell of the results.

The Office of Advocacy of the Small Business Administration lobbies Federal agencies on behalf of businesses against consumer and worker interest, using our tax dollars to argue against our interests.

OMB Watch www.ombwatch.org is one non-profit watch dog group that is watching government regulation and how it helps the public.

In future articles on this site I will provide more news on government regulation, how it can help protect workers, consumers, and the public against the actions of businesses.