Berman & Company

21

December News Brief

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Buyer's Remorse Following the Minimum Wage Ballot Initiatives

After voters in Arizona and Maine approved ballot initiatives to raise the starter wages in both states to $12 by 2020, some law makers began exploring ways they could blunt the effects of the wage hikes. In Arizona, the incoming Speaker of the House of Representatives believes the wage increase may run counter to the state's constitution. Since some budgeted projects will be affected by the 50 percent wage increase (spread out over four years), these programs will have to cut back services or the state budget will have to be adjusted, and some local groups who benefit from those services are hoping for a reprieve.

In Maine, a newspaper poll showed voters didn't understand that the 60 percent increase in the base wage would translate to a 220 percent increase in the tipped wage over four years, and a majority of voters would support changing the law. A group of restaurant employees are organizing in favor of rolling back the tipped wage increase – and preserving their jobs. The Berman and Company-managed Employment Policies Institute produced a video featuring a local business owner discussing the impact of the wage hike.

The other states voting to increase their starter wage were Colorado (which will go to $12 by 2020) and Washington state (increasing to $13.80 by 2020).

Overtime Regulations Still on Hold, Final Implementation Remains Unlikely

The Obama Administration's effort to set a $47,476 overtime eligibility threshold remains on life-support, but the rule isn't officially dead yet. The US Court of Appeals agreed to hear the Department of Labor's arguments about why the regulation should go into effect, but they won't complete the process before President Donald Trump takes office. President Trump's pick to lead the Department of Labor, Andy Pudzer, currently CEO of a major quick service restaurant, has been a forceful opponent of the new regulations, so it's unlikely that we will see a push to enact the law as originally drafted.

The appeals process is scheduled to be done by February 7th. While a number of employers have decided to continue the wage adjustments they put in place before the rule was delayed, most small businesses are waiting for the final decision to determine whether they will need to change their policies.

Fight for $15 Marches On

With the GOP controlling all branches of the federal government, prospects for a national wage hike are limited. President Donald Trump has voiced conflicting opinions about wage increases, but he has most recently supported a state-by-state approach. And that's exactly what some states are doing; Connecticut's Low Wage Employer Advisory Board just this month recommended a $15 minimum wage by 2022. The Employment Policies Institute weighed in on the Board's decision, pointing out how many businesses have closed in nearby New York as the state's patchwork quilt of wage hikes have gone into effect. Other examples of the real-life impact of wage hikes can be found on EPI's website, Facesof15.com, and many examples of job loss caused by high mandated wage rates in multiple cities were recently featured on the American Enterprise Institute's public policy blog.

MADD Criticized for Flawed Metrics in State Report Card

After Mothers Against Drunk Driving released its annual "Report to the Nation" on state-by-state drunk driving laws, the Berman and Company-managed American Beverage Institute was quick to challenge the report's assumptions. ABI argued that MADD's narrative behind two specific categories are riddled with defective arguments. For example, all-offender ignition interlock laws aren't a proven major force behind drunk driving reductions. When comparing alcohol-related fatality rates between the 24 states with all-offender ignition interlock laws and the other 26 who don't have them, there is no difference - both fall right below 30 percent.

MADD also promotes the use of sobriety checkpoints to reduce incidents of drunk driving. But research has shown sobriety checkpoints are easy to avoid because they are widely publicized by law, and on the internet. Consequently they often result in few to zero DUI arrests. In fact, roving patrols have long been understood to be more effective than sobriety checkpoints, as ABI reported in a special column to the Las Vegas Review-Journal.

Soda Taxes Explode in November

Philadelphia's soda tax will go into law on January 1, now that a lawsuit challenging the 1.5 cent-per-ounce tax was dismissed. The levy, which was passed by the council in July, had been challenged by the beverage industry as an unconstitutional, regressive tax that won't sustainably fund pre-kindergarten programs as promised. In November, four other cities passed one- or two-cent per ounce taxes on sugary beverages via ballot initiative – Albany, CA; Oakland, CA; San Francisco, CA; and Boulder, CO – while Cook County, IL, passed its version of the ordinance by a city council vote.

Despite the sudden popularity of these laws since voters in Berkeley, CA, approved the first in 2014, opponents argue the laws drive up the cost of all groceries as retailers absorb the higher tax. While consumer-reported soda consumption appears to be down, no research supports that obesity or sugar-related illnesses have decreased. Even researchers at left-leaning think tanks have already argued that soda taxes are "a limited tool for improving nutrition." Now that more cities have adopted soda taxes, Massachusetts has started a conversation about whether to implement a similar law.

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