Some exempted from minimum wage, increased or not

WASHINGTON (AP) — Some low-paid workers won’t benefit
even if a long-shot Democratic proposal to raise the federal minimum
wage becomes law.
More than a dozen categories of jobs are exempt
from the minimum, currently $7.25 an hour. Those exclusions, rooted in
labor law history, run from some workers with disabilities to crews on
fishing ships to casual baby sitters.
Legislation sponsored by
Sen. Tom Harkin, D-Iowa, would gradually raise the minimum to $10.10 by
2016. The Congressional Budget Office estimates it would mean higher
earnings for 16.5 million workers — but also would cost 500,000 others
their jobs.
Harkin’s measure wouldn’t eliminate exemptions,
including for live-in companions for the elderly, staffs of state and
local elected officials and jobs at summer camps and seasonal amusement
parks.
The federal Bureau of Labor Statistics says nearly 1.8
million hourly workers were paid below $7.25 last year — about 2 percent
of the 76 million Americans earning hourly wages. An additional 1.5
million earned exactly $7.25.
Some earning under that amount are
covered by lower requirements. In one major category, wages for tipped
employees such as waiters can be as low as $2.13 hourly, as long as
their pay reaches the overall federal minimum when tips are included.
Harkin’s measure would gradually raise the minimum for tipped workers to 70 percent of the minimum for
most workers.
Asked
why he wasn’t eliminating more exemptions, Harkin said, "I’m having a
hard enough time getting votes for the minimum wage" by itself.
According
to the statistics bureau, most people earning under $7.25 — nearly 1.1
million — work in food services and drinking establishments.
The
bureau and the Labor Department’s Wage and Hour Division said they had
no figures on how many workers were illegally paid less than $7.25.
Though
Democrats say higher-paid workers would help the economy by spending
more, Republicans point to projections that an increase in the minimum
wage could cost some workers their jobs. That negative prediction is
based on the idea that higher wages would bring higher prices and
therefore hurt the economy and employment — and also on an assumption
that a minimum wage increase would lead some businesses to trim the
number of low-paid workers.
Harkin, whose bill is slated for
Senate debate this month, said there has been "no push" from most
exempted groups for minimum wage coverage. Of the excluded groups, the
loudest objections have probably come from those representing the
disabled.
Employers receiving government certification can employ
disabled people at below the minimum wage, paying whatever they
determine reflects a worker’s productivity.
Most of these employees are mentally impaired and work in special workshops run by organizations like
Goodwill and Easter Seals.
The
Labor Department’s Wage and Hour Division says 229,000 workers were
certified for such wages last year. Groups representing disabled people
say the figure is over 400,000. Either way, they are a small portion of
the roughly 15 million disabled working-age Americans.
Advocates
for the disabled say the system, originally meant to encourage employers
to hire such workers, is being abused by some organizations that
underpay and inadequately train them.
"This is a system that lives
on the perception that these people cannot be productive," said Anil
Lewis, a top official with the National Federation of the Blind, which
wants to repeal the special wages.
But ending that program would
mean many disabled workers "would not have the dignity, purpose and
pride of a paycheck," said Terry Farmer, CEO of ACCSES, the trade group
representing Goodwill and other groups employing disabled people.
A
long-time advocate for the disabled, Harkin said he is trying separate
legislation to require employers who pay disabled workers below the
minimum wage to provide better training for higher-salaried jobs.
The
federal minimum wage was created by the Fair Labor Standards Act in
1938. That New Deal measure also limited the work week — to 44 hours
initially — and curbed child labor.
When President Franklin
Roosevelt signed the bill into law, the minimum was set at 25 cents an
hour, mainly covering industrial jobs. To win crucial votes from
Southern Democrats in Congress, Roosevelt agreed to exclude occupations
like farm laborers and domestic workers, who were largely black.
Also
exempted were some other low-paying jobs that employed many women,
including retail and many clerical workers. Many at-home jobs were also
excluded. People who make evergreen wreaths at home are exempted to this
day.
"The farther from the factory model of employment and the
closer to some family thing, the likelier you were to get some kind of
exception" to coverage, said Nelson Lichtenstein, a professor at the
University of California at Santa Barbara who has studied labor history.
Gradually,
Congress has broadened the law’s coverage, adding public school,
construction industry and many retail and farm workers in the 1960s.
Government and domestic workers were included in the 1970s. Overall, the
minimum wage has expanded from initially covering about a third of
workers to what the Congressional Budget Office says is now two-thirds.
Under
Harkin’s bill, lower minimum wages for some workers would grow because
they are linked to the full minimum wage. That includes many fulltime
students, who must get at least 85 percent of the full minimum.
Unchanged would be the $4.25 hourly minimum for teenagers’ first 90 days of work.
Others
still exempted from minimum wage coverage would include workers at some
small-circulation newspapers and small farms, and people who deliver
newspapers. And some businesses with annual sales below $500,000 are
exempt.
Administrative, professional and executive employees also
are excluded, though most earn more than the minimum wage. President
Barack Obama has ordered the Labor Department to write new rules
qualifying more salaried management workers for minimum wage and
overtime coverage.
William Samuel, the AFL-CIO’s government
affairs director, said the labor organization urged Harkin to raise the
tipped workers’ minimum in his bill. He said his group hasn’t sought
minimum wage coverage for other excluded occupations in "some unique and
fairly small industries we haven’t focused on."
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