Tartaglione, Governor Rally Raise the Wage Supporters in Frankford

Senator Tartaglione and Gov. Tom Wolf were joined by Philadelphia Mayor Jim Kenney, numerous state legislators, labor leaders, worker advocates, and commuters at SEPTA’s Frankford Transportation Center on Friday for a public rally in support of a new plan to raise Pennsylvania’s minimum wage.

Tartaglione and Wolf revealed their new minimum wage plan during a January 29 news conference at the Capitol. The senator will soon introduce legislation in the Senate (S.B. 12) that proposes to raise the minimum wage from the federal minimum of $7.25 per hour to $12 this year, and an additional 50 cents annually until it reaches $15 in 2025. After then, the minimum wage would be adjusted annually, automatically based on the cost of living.

Dozens of passers-by witnessed Friday’s rally, where Tartaglione, Wolf, and other participants highlighted how minimum wage reform is long overdue in Pennsylvania. The state last raised its minimum wage in 2006.

All six of Pennsylvania’s neighboring states have increased their minimum wages above the federal minimum, led by New York, which rose to $11.10 on Dec. 31. Early this month, New Jersey enacted legislation to raise its minimum wage to $10 this year, $11 next January 1, and $15 over the next several years.

Twenty-nine U.S. states and the District of Columbia have raised their minimum wages above the federal minimum. New raises took effect in 18 states last month. On Feb. 7, the Illinois Senate adopted $15 minimum wage legislation that is expected to be adopted by the state’s House and be signed into law by the governor.

Lawmakers in Harrisburg, Washington Hear Minimum Wage Testimony

The Republican leadership of the Labor & Industry Committee in the Pennsylvania House wasted little time gathering public testimony from anti-minimum wage analysts on the heels of Governor Wolf’s and Senator Tartaglione’s new minimum wage proposal.

During a Feb. 6 committee hearing at the Capitol, economics professors from Susquehanna and Duquesne universities testified that they oppose the application of any minimum wage, regardless of the amount, according to a WHYY report. The academic officials cited case examples from Duquesne and Seattle for their opposition, the Tribune-Democrat reported. In both instances, the witnesses claimed, jobs were lost after minimum wage raises took effect.

The committee’s minority chairman said after the session that research on the impact of minimum wage raises is mixed and that the committee should seek more “balanced” sources in future hearings on the topic.

Federal lawmakers are also examining raise the wage legislation. On Feb. 7, the U.S. House Committee on Education and Labor held its first hearing on the proposed Raise the Wage Act, which would create a $15 federal minimum wage by 2024. The legislation has about 180 House co-sponsors, all Democrats, according to Vox.com, but is likely to face strong opposition from Senate Republicans.

“But it’s getting harder and harder for Republicans to justify their view that free-market capitalism — the idea that when the economy grows and unemployment is low, employers will be forced to raise wages — will take care of everyone,” Vox.com reported. “It may have happened in the past, but the strong economy is not raising wages right now — at least, not fast enough to outpace the rising cost of living.”

Meanwhile, additional legislation has been introduced in both chambers of Congress that would end the subminimum wage rules that allow employers to pay less than minimum wage to people with disabilities. The proposed Transformation to Competitive Employment Act would require the U.S. Department of Labor to stop issuing certificates that allow employers to pay prorated wages to people with disabilities on their individual capabilities.

DisabilityScoop reported that U.S. Sen. Bob Casey of Pennsylvania introduced the measure in the Senate, while U.S. Rep. Bobby Scott of Virginia introduced it in the House. Critics of the subminimum wage say the system is exploitative of people with disabilities, that it isolates and stigmatizes them. Supporters say that the program provides affected workers, particularly those with severe disabilities, with “a sense of purpose” and the opportunity to work in an environment “surrounded by peers.”

Thousands of Sears, Kmart Workers Win Reprieve for Now

A federal bankruptcy judge on Feb. 6 approved a $5.2 billion bid from the chairman of Sears Holdings Corp. to forestall liquidation of the venerable Sears and Kmart retail chains and preserve about 45,000 jobs. But a group of workers remain skeptical that the approved sale will lead to long-term sustainability of the company.

“In a letter sent to U.S. Bankruptcy Judge Robert Drain, a group of employees for Sears Holdings, through an action group called Rise Up Retail, urged the presiding judge to give them a ‘seat at the table,’ saying the transaction is just a scheme for the billionaire and former Sears CEO to ‘steal’ key Sears assets,” Fox Business reported.

In approving the bid of ESL Investments (a hedge fund controlled by Sears Holdings chairman and former CEO Eddie Lampert), the judge rejected opposition from creditors who sought a sell-off of the company’s assets. The creditors argued that Lambert, “who engineered the 2005 merger of Sears Roebuck and Kmart, plundered the company’s assets and failed to invest enough in stores to make it successful,” Bloomberg Law reported.

The employees, in their letter to the judge, claimed that Lampart has made “more than a billion dollars” by selling Sears assets to other corporations he controls or has major stakes in. Meanwhile, they wrote, Lampart “has destroyed more than 250,000 jobs in the process, put countless families in financial harm, closed the vast majority of Sears and Kmart stores and put the company on the brink of liquidation.”

The approved sale would save about 425 stores from imminent closure, although the winning bid has identified 156 of those stores as weak performers, an acknowledgement that has some analysts predicting more store closings.

Rideshare Drivers, Gig Economy Workers Gaining Rights on Both Coasts

Two of New York City’s four principal rideshare companies have filed a lawsuit to block the city’s new minimum wage rules for rideshare drivers.

Lyft and Juno filed the claim in New York State courts on Feb. 1 to oppose a new wage formula that would require rideshare companies to pay drivers at least $17.22 per hour. Gig economy businesses and worker advocates are expected to monitor the case closely because it may have broader implications for the classification of non-employee contractors.

New York City Council approved the new pay formula in December. As the measure was about to take effect, Lyft and Juno sought an injunction, which was rejected by a judge of the state’s First Judicial District in Manhattan. The court allowed the companies to withhold the required pay from drivers and to place the funds in escrow pending the outcome of their suit, but both companies – under pressure from unionized drivers – ultimately decided to start paying the new rate while the case proceeds.

Two other rideshare companies, market leader Uber and Via, opposed the minimum wage when it was under consideration by city officials, but have agreed to raise their drivers’ pay in accordance with the new rules.

The city’s Taxi and Limousine Commission reached the $17.22 per hour figure based on a $15 base wage plus supplements to cover payroll taxes and paid leave. The pay must be calculated on a per-trip basis (not averaged over the course of a shift or a pay period).

Traditionally, drivers have been paid only for the periods when a passenger is in the car, as a factor of distance traveled and elapsed time. The new system uses a formula to account for the time that a driver is logged into the rideshare app and available to pick up passengers, even when they are not on trips.

Lyft and Juno argue that the new pay formula favors Uber and Via because those companies have higher utilization rates and will be able to charge lower fares while meeting the new driver pay requirements. That is, Uber and Via drivers are busier than Lyft and Juno drivers, so they already make more in fares per hour.

The New York lawsuit comes at a time when authorities in California are wrestling over the implications of an April 2018 state Supreme Court decision that made it harder for businesses there to classify workers as independent contractors.

The “ABC test” precedent dictates that “workers are employees if companies control what they do, if their tasks are central to a company’s core business, and if they don’t run independent businesses doing that work,” the San Francisco Chronicle reported.

Unions are pushing for state lawmakers to reinforce the precedent through new legislation, but companies oppose the rewriting of applicable state law.