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NC Budget and Tax Center

Yesterday, Lawrence Mishel from the Economic Policy Institute made the compelling case that policymakers have missed the mark by focusing on tax levels rather than wage stagnation in their pursuit of improving growth rates and the economic well-being of the majority of Americans.  As Mishel points out:

Wage stagnation is a decades-long phenomenon. Between 1979 and 2014, while the gross domestic product grew 150 percent and productivity grew 75 percent, the inflation-adjusted hourly wage of the median worker rose just 5.6 percent — less than 0.2 percent a year. And since 2002, the bottom 80 percent of wage earners, including both male and female college graduates, have actually seen their wages stagnate or fall.

At the same time, taxation does not explain why middle-income families are having a harder time making ends meet, even as they increase their education and become ever more productive. According to the latest Congressional Budget Office data, the middle 60 percent of families paid just 3.2 percent of their income in federal income taxes in 2011, less than half what they paid in 1979.

Mishel goes on to detail a policy agenda that is far better targeted than tax cuts for delivering benefits to the majority of American workers and the broader economy.  This agenda includes some familiar proposals also appropriate for state policymakers: addressing wage theft and misclassification, raising the minimum wage and protecting workers rights to collectively bargain.  It also includes important macro-economic and trade policy choices like stopping the offshoring of jobs through trade deals like the Trans-Pacific Partnership and ensuring the Federal Reserve holds interest rates down until wage growth is more robust.

Again in Mishel’s own words:

Contrary to conventional wisdom, wage stagnation is not a result of forces beyond our control. It is a result of a policy regime that has undercut the individual and collective bargaining power of most workers. Because wage stagnation was caused by policy, it can be reversed by policy, too.

News

A chain of Mexican restaurants with a Jacksonville location is paying more than $50,000 in back wages to employees, after federal authorities discovered some workers weren’t receiving minimum wage.

Pancho Villa Mexican Restaurants, a small chain with one location near the Camp LeJeune Marine Corps Base, was not paying dishwashers and cooks at the federal minimum wage ($7.25), nor was it paying overtime, ac according to a news release from the U.S. Department of Labor.

The underpayments affected 30 workers from December 2010 to December 2013 at the company’s eight Virginia locations (in Fredericksburg, Culpeper, Dahlgren and Stafford) and its sole North Carolina location at 2121 N. Marine Blvd. in Jacksonville.

Pancho Villa’s owners agreed to pay $57,446 in back wages to 30 employees, as well as a $6,600 fine.

Federal labor officials are looking for former employees of the restaurant. Those affected can all the Wage and Hour Division at (804) 771-2995.

Commentary
Mandy Locke

Mandy Locke

Looking to learn about an issue — any issue — on which the North Carolina General Assembly might actually pursue a moderately progressive course in 2015? If so, you should definitely plan on attending this Wednesday’s Crucial Conversation luncheon with Raleigh News & Observer reporter Mandy Locke: “Fraud in the workplace: How numerous North Carolina employers are cheating their competitors and stealing from employees and taxpayers (and what should be done about it).”

Locke will discuss the ongoing multimillion dollar crime spree in North Carolina in which “wage theft” and “worker misclassification” by dishonest employers are both robbing workers (and state tax coffers) of millions and millions of dollars. Please join us as we explore this huge and poorly understood problem and how state lawmakers and regulators might properly address it.

Locke will be joined by Raleigh businessman Doug Burton, President and Owner of Whitman Masonry and one of the numerous North Carolina employers who treats his workers fairly, plays by the rules and is regularly disadvantaged as a result of the state’s lax law enforcement in this area and Bill Rowe, General Counsel and Director of Advocacy at the North Carolina Justice Center, who will discuss possible legislative and law enforcement solutions.

When: Wednesday, January 28th, at noon — Box lunches will be available at 11:45 a.m.

Where: Center for Community Leadership Training Room at the Junior League of Raleigh Building, 711 Hillsborough St. (At the corner of Hillsborough and St. Mary’s streets)

Space is limited – preregistration required.

Cost: $10, admission includes a box lunch.

Click here to register

Questions?? Contact Rob Schofield at 919-861-2065 or rob@ncpolicywatch.com

Commentary

Please join us next week for a special NC Policy Watch Crucial Conversation luncheon —

“Fraud in the workplace: How numerous North Carolina employers are cheating their competitors and stealing from employees and taxpayers (and what should be done about it)”

Click here to register

There’s a multimillion dollar crime spree underway in North Carolina. Unfortunately, save for the efforts of a few intrepid journalists and lawyers, it’s a problem that’s mostly being ignored and swept under the rug. The issue is wage theft and the “misclassification” of workers by employers. As Raleigh’s News & Observer reported in a special report last fall entitled “Contract to Cheat”:

“Employers treat many of these laborers as independent contractors. It’s a tactic that costs taxpayers billions of dollars each year. Yet when it comes to public projects, government regulators have done nearly nothing about it, even when the proof is easy to get.

The workers don’t have protections. The companies don’t withhold taxes. The regulators don’t seem to care.”

Mandy Locke

Please join us as we explore this huge and poorly understood problem and how state lawmakers and regulators might properly address it with the lead author of the “Contract to Cheat” series, investigative reporter Mandy Locke.

Since joining the N&O in 2004, Locke has written extensively about the legal system, child welfare and hospital disputes. Her investigative work has been honored nationally by the Michael Kelly Award and the Gerald Loeb Award for business reporting.

Locke will be joined by Raleigh businessman Doug Burton, President and Owner of Whitman Masonry. Burton is one of the numerous North Carolina employers who treats his workers fairly, plays by the rules and is regularly disadvantaged as a result of the state’s lax law enforcement in this area.

When: Wednesday, January 28th, at noon — Box lunches will be available at 11:45 a.m.

Where: Center for Community Leadership Training Room at the Junior League of Raleigh Building, 711 Hillsborough St. (At the corner of Hillsborough and St. Mary’s streets)

Space is limited – preregistration required.

Cost: $10, admission includes a box lunch.

Click here to register

Questions?? Contact Rob Schofield at 919-861-2065 or rob@ncpolicywatch.com

Commentary

Cherie Berry 2It simply shouldn’t take a four-year herculean effort by an extraordinarily dedicated lawyer in order for a handful of average workers to get paid an honest day’s wage for an honest day’s work. Unfortunately, as this story by reporter Mandy Locke in this morning’s edition of Raleigh’s News & Observer makes clear, it does take such an effort these days in North Carolina where the state’s absurdly low-energy Labor/Elevator Commissioner Cherie Berry continues muddle along, doing as little as possible to protect the workers of our state.

As Locke reports:

“Every few months for nearly four years, Katharine Woomer-Deters had lugged a box full of records three blocks from her office to the Wake County courthouse. Inside it: all the proof and power she should have needed to force a Raleigh contractor to pay wages he owed to seven workers for labor in 2010.

Woomer-Deters and her employer, the N.C. Justice Center, have devoted tens of thousands of dollars worth of time and energy trying to get Robert Charleton Miller, owner of Raleigh construction company NC Contracting Inc., to pay the $14,000 he owed.

Finally, on Thursday, Woomer-Deters got what she needed: a payment from Miller. He signed an agreement to pay monthly until his debt is settled. He made his first installment Thursday.

It took the threat of jail and a stern judge to push Miller toward the settlement.”

And, of course, this latest development is just the latest in a scandalously long trail of cases in which employers across North Carolina have been failing to pay workers the wages and benefits to which they are entitled. As Locke reported last fall in her five-part “Contact to Cheat” investigation: “North Carolina is losing $467 million in annual tax revenue from the practice within the construction industry alone.”

Unfortunately, state Labor Commissioner Berry — the constitutional officer charged with protecting the workers of our state from such predations — continues to snooze away through her fourth full term in office, out of sight and out of mind. There’s no word yet on whether Berry intends to seek a fifth term in 2016, but if her somnambulant performance in office over the past decade and a half is any indication, she’ll probably mail in her decision.