As Cities Raise Minimum Wages, Many States Are Rolling Them Back

Jul 18, 2017
Originally published on July 21, 2017 4:47 pm

State legislatures and city halls are battling over who gets to set the minimum wage, and increasingly, the states are winning.

After dozens of city and county governments voted to raise their local minimum wage ordinances in the last several years, states have been responding by passing laws requiring cities to abide by statewide minimums. So far, 27 states have passed such laws.

The latest example of this is in Missouri, where a state law will take effect next month, rolling back St. Louis' $10-an-hour minimum wage ordinance passed earlier this year. That means thousands of minimum-wage earners in the city could go back to earning the state rate of $7.70 an hour.

Janitorial worker Cynthia Sanders now has a longer commute into St. Louis, having moved further out because the cost of living was too high and she needed more space to raise her three grandchildren. When the Missouri state law takes effect, she says her wages will decrease and she'll have to cut back again.

"I'm just scared for everybody, because it's a sad, sad situation, and I don't understand how it's legal," Sanders says.

Similar rollbacks occurred this spring in four counties in Iowa that had earlier voted to increase their wages.

This is part of bigger policy battles over a variety of local laws — from paid leave to ride-hailing — that increasingly pit cities against state legislatures, where more conservative rural interests tend to wield a lot of power.

Minimum-wage increases had popular backing in cities, especially since the federal minimum hasn't been raised since 2009, says Brooks Rainwater, a senior executive at the National League of Cities.

"People within cities, where the cost of living often times can be higher, needed a raise and city leaders have responded to that," he says, and now states are undermining those efforts.

Business groups, meanwhile, argue that complying with disparate city laws is too complex, and that the additional costs would force them to curtail hiring which, in turn, hurts workers. In allowing the preemption law to take effect, Missouri Gov. Eric Greitens cited a University of Washington study on the negative effects of Seattle's minimum wage hike — a controversial study some experts dispute.

Rainwater says whether on the issue of minimum wage, or paid sick leave, or other municipal measures regulating ride-hailing or home-sharing, states are now undermining city government.

"There used to be a shared value around this concept of local control, you know, whether a conservative or a liberal, the idea that the representative closest to the people would be able to decide many of these fundamental questions," he says.

Rainwater says attorneys representing cities have brought suit in court, challenging some of these preemption laws, but they face an uphill battle.

"A big challenge here is, cities aren't enumerated within the constitutional powers, so they are, in effect, creations of the state," with little legal recourse, he says.

Pat White, president of the central labor council for the AFL-CIO in St. Louis, says minimum-wage workers will lose income when the Missouri law takes effect Aug. 28, but so will workers higher up on the wage scale who were hoping to see corresponding increases as well.

White calls state lawmakers' moves hypocritical, given how they chafe against similar efforts at the federal government to control states.

"They're always complaining about how the federal government is dipping into what they want to do here in the state, but they're doing the exact same thing with the municipalities here, from the state level," he says. "Why have them even run for office, if they're not allowed to govern their own area," he says of city officials.

Having a patchwork of different city or county laws can be a headache for employers to maneuver, especially when they have employees in many jurisdictions, says Mike Aitken, vice president of government affairs for the Society for Human Resource Management. Take a trucking company that has drivers based in, or driving around, many jurisdictions. "It becomes an administrative headache for sophisticated employers, let alone for a lot of your smaller employers that may be operating within one state," he says.

Aitken says in passing preemption laws, states are operating well within their rights.

"Cities are allowed to set their own minimum wage, but so are states then allowed to preempt them," he says.

The issue has made a political crusader of Sanders, the janitorial worker.

"We're mad enough to really, really fight now," she says, adding that she intends to call a long list of legislators and pay some of her state lawmakers a visit next week.

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State governments are increasingly facing off with city halls over what the minimum wage should be. Over the past several years, dozens of city and county governments have raised their base wages to levels far above the federal minimum wage of $7.25. Some state legislatures are saying, not so fast. They've passed laws limiting what the cities can do. NPR's Yuki Noguchi reports.

YUKI NOGUCHI, BYLINE: The last time the federal minimum wage was raised was in 2009. Brooks Rainwater, a senior executive at the National League of Cities, says the municipal measures had popular backing.

BROOKS RAINWATER: Seeing as we haven't had a raise in the minimum wage at the federal level, people within cities where the cost of living oftentimes can be higher needed a raise. And city leaders have responded to that.

NOGUCHI: Business groups, meanwhile, argue complying with disparate city laws is too complex, and that the additional costs would force them to curtail hiring, which in turn hurts workers. State legislatures where more conservative rural interests tend to wield a lot of power responded, and now 27 states have passed laws pre-empting local laws and setting statewide limits on minimum wages. Missouri's new law takes effect next month, rolling back a $10 an hour minimum wage in the city of St. Louis to the statewide rate of $7.70. Similar rollbacks occurred this spring in four counties in Iowa that had voted to increase their wages. Rainwater says this trend is undermining local governance.

RAINWATER: There used to be a shared value around this concept of local control. You know, whether a conservative or a liberal, the idea that the representative closest to the people would be able to decide many of these fundamental questions.

NOGUCHI: He says attorneys representing the cities face an uphill battle.

RAINWATER: A big challenge here is cities aren't enumerated within the constitutional powers. And so they are in effect creations of the state.

NOGUCHI: Pat White is president of the central labor council for the AFL-CIO in St. Louis. He says minimum wage workers will lose income when the law takes effect August 28, but so will workers higher up on the wage scale who were hoping to see corresponding increases as well. White calls state lawmakers' moves hypocritical given how they chafe against federal control.

PAT WHITE: They're always complaining about how the federal government is dipping into what they want to do here in the state, but they're doing the exact same thing with municipalities here from the state level.

NOGUCHI: White says it raises questions for him about the point of city government.

WHITE: Why have them even run for office if they're not allowed to govern their own area?

NOGUCHI: The reason, says Mike Aitken, director of government affairs for the Society for Human Resource Management, is that having a patchwork of laws is highly impractical.

MIKE AITKEN: It becomes an administrative headache for sophisticated employers, let alone for a lot of your smaller employers that may be operating within one state.

NOGUCHI: Aitken says there are other ordinances around paid and sick leave that make it very difficult for a trucking company, for example, whose employees may operate in many jurisdictions. He argues states are operating well within their rights.

AITKEN: Cities are allowed to set their own minimum wage, but so are states then allowed to pre-empt them.

NOGUCHI: Cynthia Sanders now commutes into St. Louis city for her janitorial job after moving further out because the cost of living was too high. She says when the Missouri state law takes effect, her wages will fall and she'll have to cut back again.

CYNTHIA SANDERS: I'm just scared for everybody 'cause it's a sad, sad situation. And I don't understand how it's legal.

NOGUCHI: Sanders says the issue is making a political crusader of her.

SANDERS: We're mad enough to really, really fight now.

NOGUCHI: As soon as she hangs up with me, she says, she's calling a long list of legislators. Yuki Noguchi, NPR News, Washington.

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