Local Government Law: Friend or Foe in the Fight for $15 and Minimum Wage Reform?

President Obama and the Department of Labor continue to advocate for a federal minimum wage hike—the federal minimum wage has been $7.25 since 2009—attempting to use the President’s Executive Order raising the minimum wage to $10.10 for federal contractors as a model. Reform at the national level has remained unsurprisingly gridlocked. However, there has been movement on the issue at the state level. In 2012, eighteen states had minimum wages above the federal rate, up from twelve states in 2009. The start of 2015 brought with it rising wages for minimum wage workers in twenty states, some as a result of indexed increases in their state law (Arizona, Colorado, Florida, Missouri, Montana, New Jersey, Ohio, Oregon, and Washington), others because of approved ballot measures from the 2014 general elections (Alaska, Arkansas, Nebraska and South Dakota), and others because of reform taken on by state legislatures in 2014 (Connecticut, Delaware, Hawaii, MarylandMassachusetts, Michigan, MinnesotaRhode Island, Vermont, and West Virginia).

But 2014 also saw cities joining the minimum wage reform conversation. The “Fight for $15” led by the fast food workers movement and other living wage workers’ rights groups all over the country has made significant strides at the municipal level. The growing list of cities considering or passing minimum wage hikes continues to grow, including SeaTac, San Jose, San Francisco, Washington D.C., Seattle, San Diego, and Santa Fe. This activity on the local level has not come without controversy. Some have asked the question: Should cities play a role in minimum wage reform?

Those that say yes claim that state minimum wages do not protect workers in high cost of living urban centers. The state minimum wage (or in some cases, the federal minimum wage because states like Alabama and Louisiana have no state minimum wage) may be high enough to cover the basic necessities of life in some areas of the state or even across the majority of the state. However, workers living in more expensive, urban areas may “struggle to make ends meet.” As Charles Gascon from the St. Louis Fed says, for some states, a more locally-based minimum wage might be an option for managing the vast differences in purchasing power that can occur in one state. Further, from an organizing perspective, cities can be a better and more accessible forum for mobilization and building political pressure than the state or national level.

But there are risks inherit in this strategy, one being the nature of local government law. Those who would see the municipal level as being an access point for progressive policy regarding wages should consider the problematic legal treatment of the city with respect to the state. The underlying premise of nearly all of local government law is that the city is a creature of the state. Hunter v. City of Pittsburgh (1907). Under Home Rule (as it is constructed in most granting statutes) and the Dillon Rule (John Dillon, Treatise on the Law of Municipal Corporations 1872), city power must be expressly granted powers by the state or the grant of those powers must be necessarily and fairly implied. City powers are strictly construed, with ambiguity typically read against a grant of power to localities. Many courts have narrowly interpreted the categories included in the “local ambit.” See Olesen v. Town of Hurley (S.D. 2004), McCrory Corp. v. Fowler (Md. 1990) Marshall House v. Rent Review and Grievance Board of Brookline (Mass. 1970), Arlington Co. v. White (Va. 2000). Cities without expressly granted wage reform power run the risk of having local laws struck down. Much worse, cities risk actually losing jurisdictional power over an even broader scope of issues related to employment, wages, workers, etc., within their borders. That is, there is significant risk that success in moving reform forward on the local level might actually backfire, leading states to enact greater restrictions on city power than exist presently.

This risk is playing out in Missouri, with a bill proposed recently by a state lawmaker, Republican Rep. Caleb Rowden. The bill would prohibit municipalities from raising their minimum wage. It would also “prohibit local laws requiring employers to offer paid sick leave or other benefits, or prohibit employers from asking about criminal convictions early in the job application process.” Put simply, the law could severely limit local governments ability to make progressive laws regarding employment and workers’ rights policy. Missouri would not be the first. As of April 2014, state law prohibits cities in Oklahoma “from establishing mandatory minimum wage or vacation and sick-day requirements.”

Clearly, cities attempting wage reform without strong state support or with strong state conservative opposition may face serious barriers. This is true regardless of strong local support and political capital for such measures. Given this reality, the chill on the exercise of city power may stop reform efforts on the municipal level before they begin. As a result of the consciousness of their precarious mandates, even with Home Rule power from the state to enact local policy, cities often seek express state approval of projects, diminishing local power under the presumption of preemption. (David Barron and Gerald Frug City Bound 2010). In New York City, for instance, there is an active proposal to raise the minimum wage above the state’s minimum, which as of this year is set at $8.75, due to the high costs of living associated with living in America’s biggest city. However, political leaders are currently grappling with a state law that prohibits localities from enacting a separate minimum wage, meaning that the nod to allow for minimum wage reform on the city level will first have to come from the state legislature, suggesting the need for a bifurcated, two-front political approach to achieve wage reform within city limits.

The municipal level approach has significant perks. A targeted campaign geared in the localities where the minimum wage is most out of touch with the cost of living means that reformers have stronger, more salient arguments. Organizing and mobilizing support at the local level is more manageable than at the state level and, as the list of cities with recent minimum wage reform would indicate, may be more successful. Successful local reform may even trickle up to the state level. On the flip side, the state legislature could overturn city reforms, which could also be challenged in the court as an overreach of municipal power. Further, the state’s reaction to city lawmaking on this issue could include a contraction of the city power on this area of issues. Flatly, the risk of a locally geared strategy might mean winning the battle but ultimately losing the war.

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