Report: Pro-business groups are attacking wage and labor standards, one state at a time

November 1, 2013

A crowd of fast-food workers and supporters call for raising the federal minimum wage outside a Memphis, Tenn., McDonald’s.

State lawmakers have been systematically stripping away labor and wage standards, according to a new research report.

Rules have been enacted to prevent minimum wage hikes and mandated paid sick leave, while others have made it harder to recover unpaid wages or collect unemployment benefits.

“This is coordinated and national,” the report’s author, University of Oregon professor Gordon Lafer, said during a Thursday morning panel unveiling the report. It was produced for the Economic Policy Institute, which focused on the needs of low- and middle-income workers, and where Lafer is a research associate. (Disclaimer: I moderated Thursday’s panel.)

The paper explores a series of free-market policies pursued or enacted in 2011 and 2012. Four states limited the minimum wage or at least to whom it applied, another four made it easier for children to work and 16 imposed new limits on unemployment benefits.

Some states pursued legislation that would make it harder for employees to collect overtime or recover wages that hadn’t been paid. And others also passed or pursued laws that restricted the rights of local governments to set their own standards. In Florida, for example, an Orange County movement to require paid sick leave was quashed when the state passed a law prohibiting counties and cities from enacting such measures.

The report represents a shift from EPI’s typically wonky fare. It ascribes a narrative, supported by research, to a recent policy trend: wage and labor deregulation, driven by the agenda of a set of national pro-business groups.

“The most powerful corporate lobbies in the country are working across the country in every state legislature and on almost every dimension of the labor market to lower wages and benefits,” Lafer said on Thursday.

Those groups include the pro-business Chamber of Commerce, National Association of Manufacturers, the Club for Growth, Americans for Prosperity and the American Legislative Exchange Council. That last group, ALEC, has played a particularly significant role, he says.

ALEC, a non-profit that advocates for free markets and limited government, provides a library of model legislation for its nearly 2,000 lawmaker-members to use and modify. It also counts nearly 300 corporations and foundations as members, though several have left as the organization came under fire in recent years.

“In many cases, ALEC pursues initiatives that directly benefit the bottom line of its corporate partners,” Lafer wrote in the paper.

But the group argues that the paper doesn’t understand its role.

“I think it mischaracterizes exactly what the Exchange Council is and what it is that we do,” says Cara Sullivan, the director of ALEC’s Commerce, Insurance and Economic Development task force and a policy expert on wage issues.

ALEC’s model legislation can only be introduced by its legislator-members, Sullivan said. Then the drafts are discussed, refined and approved by ALEC’s board, which is again only composed of lawmakers, she said. ALEC isn’t pushing an agenda on its members, they’re the ones driving what it does, Sullivan said.

“Free-market advocates and free-market-minded legislators would support the deregulation of certain industries,” Sullivan said.

In 2012, New Hampshire House Speaker William O’Brien explained in a local letter-to-the-editor that he joined ALEC precisely because of its free-market orientation.

“Opponents’ attacks are happening because ALEC members support free market healthcare, tax fairness, tort reform and a limited, more transparent government,” he wrote. “This entire campaign is an attempt to silence conservatives.”

Lafer’s report, the culmination of about a year and a half of research, outlines a broad state-by-state effort to deregulate and unwind various labor and wage standards. The 79-page report, much of it dedicated to its more than 300 endnotes, focused exclusively on laws and bills drafted or strongly endorsed by pro-business groups.

New Hampshire, for example, recently repealed its minimum wage, which House Speaker and ALEC member William O’Brien had said made the state less competitive.

Michigan increased the number of hours students may work in a given week from 15 to 24 in a bill endorsed by the Chamber of Commerce, Small Business Association and National Federation of Independent Businesses.

In Wisconsin, seven ALEC members introduced a bill that repealed the damages victims of employment discrimination could receive. It became law on April 20, 2012.

Niraj Chokshi reports for GovBeat, The Post's state and local policy blog.
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