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We've had folks asking what kind of language might be appropriate for a national living wage bill. Using the Universal Living Wage formula, we've come up with these possible suggestions. Because this is still at the concept stage, all suggestions that might address specific needs of employers or employees are most welcomed.

September 8, 2003

Labor Day's Major Issue: The Minimum Wage

By: Congressman Lamar Smith (Texas-21st Republican)
Each year on the first Monday in September we celebrate Labor Day. It is dedicated to the economic achievements of American workers.
The movement for a national Labor Day began in 1882. That year thousands of union workers in New York took an unpaid day off and marched in support of a state labor holiday. In 1894, after 29 states adopted the holiday in honor of workers, President Grover Cleveland signed a Congressional resolution making Labor Day a national holiday.
As we acknowledge the contributions of working men and women on Labor Day, an issue that is likely to come before Congress is the minimum wage. It is important to have an honest debate based on the facts, which all too often are missing when discussing the need for an increase in the minimum wage.
Specifically, who receives the minimum wage? Despite what proponents of a higher minimum wage imply, the majority are not the head of a household. In fact, less than 7 percent are sole breadwinners who work full time and have children. Almost half of all minimum wage workers are teenagers and more than half of all minimum wage workers work part-time.
Advocates for an increase in the minimum wage, which is $5.15 an hour, also do not take into account other cash and non-cash benefits, such as child care subsidies, food stamps, Medicaid and the Earned Income Tax Credit. The total income for a minimum wage recipient, both cash and non-cash, is over $16,000.
On the other hand, opponents of the minimum wage also omit key facts. They often do not appreciate how difficult it is for an individual to live on the minimum wage. And with housing the largest part of almost every budget, the minimum wage earner usually cannot even afford an efficiency apartment, which has no separate bedroom.
The Department of Housing and Urban Development recommends that an individual spend no more than 30% of their income on housing. However, that guideline doesn’t allow for the situation where individuals live in different rent areas from where they work. Still, some form of a variable minimum wage may be more equitable than a one-size-fits-all approach that doesn’t consider housing costs in different locations.
Perhaps Congress should consider a minimum wage that accounts for the cost of living in different communities. For example, based on the fair market rents calculated by the Department of Housing and Urban Development, minimum wage recipients in San Antonio and Austin cannot afford housing. But Kerrville minimum wage residents can. It varies from area to area.
If there is going to be a minimum wage – and there are strong free-market arguments against it – than having a variable minimum wage tied to the local cost of housing could be fairer than the current system.
In some future year, Labor Day might include the celebration of a new kind of minimum wage.

August 28, 2003
Federal legislation under consideration as it relates to the Universal Living Wage and the Fair Labor Standards Act which defines the federal minimum wage for the United States of America.
A Bill to provide a fair wage for all minimum wage workers.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled

Section 1- Short Title- This bill may be known as the Economic Fairness and Security Act of 2003.

Section 2- findings
Whereas;
UNEVEN PROGRESS- In recent years, the income and wealth gaps in the United States, have expanded greatly among individuals.

Many individuals have become rich or richer, poor individuals have become more numerous, and many individuals have found that they must depend on two jobs just to maintain basic housing.
Localized mass depression appears in the midst of opulence, and unmet basic needs exist as the norm.
New jobs increasingly come at lower wage levels with minimum wage levels reaching only 70% of the amount necessary to operate a single household.
SOUND BUSINESS PRACTICES
Whereas;
Minimum wage workers are the basic worker building blocks of our nation's economy, and there are 10.1 million minimum wage workers. It is recognized that minimum wage workers cannot obtain and retain even the most basic form of housing at current minimum wage levels.
Principally falling from the worker pool, 3.5 million people will experience homelessness this year. (Nearly 40% of these homeless persons are children and 30% of whom are veterans).
It is also recognized that redirecting employer time and training replacement minimum wage workers, costs the national economy billions of dollars each year in terms of lost productivity and retraining costs.

Furthermore, individuals failing to meet basic life sustaining economies in efforts to merely survive, find ancillary black market incomes which further causes the erosion of the worker tax base and further burdens tax rolls by grossly straining limited law enforcement resources.
It is recognized that due to economic evolution and the resulting uneven inflationary housing costs throughout the United States, it is no longer possible to use a single wage level to achieve an equitable or appropriate minimum wage nationally.
Furthermore, it is recognized that to select a single minimum wage that would enable a full-time minimum wage worker in one geographic area to obtain basic housing would simultaneously cause irreversible damage to minimum wage employers in other geographic areas. As a result, it is imperative that a minimum wage formula be devised that is indexed to the local cost of housing throughout the United States which ensures that anyone working a full time job (or 40 hours in a week), will be able to afford basic housing throughout the United States and at the same time protects the economic stability and viability of small businesses.
The formula should also recognize that the United States Department of Housing and Urban Development (HUD) has determined that as part of this equitable relationship, an individual should spend no more than 30 % of their income on housing.
Bill enactment will reduce reliance on food stamps and similar such supports which burden tax payers. Enactment will enable over one million minimum wage workers to work themselves off of America's streets and restore them to our nation's work force and tax rolls.

Section 3
Therefore;
United States code 29 Title 8 section 206(a)(1) is amended as follows; After "not less than" insert "a wage that is at least equal to a Universal Living Wage for the HUD determined FMR district in which the employee resides."

Section (g) is amended as follows; "newly hired" is deleted
Section (g) (1) is amended as follows; After "not less than" insert "a rate that is equal to four-fifths of the ULW for the HUD determined FMR district in which the employee resides."
Definitions
Section 3(y) "Fair Market Rent (FMR) is a fair market rent as determined by the United States Department of Housing and Urban Development as found in Section 8 ( C )(1) of the United States Housing Act of 1937 (42 U.S.C. 1437f) and authorizes housing assistance to help lower income families rent safe, decent and sanitary housing. FMRs are gross rent estimates; they include shelter rent and the cost of utilities except telephone. FMRs are established for different sized rental units which are expressed in terms of the number of bedrooms in a housing unit.
(z) "Fair Market Rent Area" is the metropolitan or non-metropolitan country as determined by the United States Department of Housing and Urban Development, in which a Fair Market Rent applies.
z(a) "Efficiency Apartment"- a small (usually furnished) apartment with minimal kitchen and bath facilities and classified as "less than" a one bedroom apartment.
z(a)1 "Universal Living Wage"is a wage that ensures that anyone working a 40 hour week will be able to afford basic rental housing wherever that work is done throughout the United States. It encompasses the HUD guideline that no one should spend more than 30% of their income on housing.
z(a)2 "The Universal Living Wage Formula" is the Universal Living Wage as expressed as a mathematical formula.
z(a)2 "Transition period" is that period of time between when the bill becomes law and that period of time when the law goes into effect as it relates to the wage change.

Section 4- Adjustments
Increases in the ULW shall be automatically determined as HUD alters the FMR for any district for which a FMR has been determined.

Section 5- Benefits
Benefit levels;
Any government agency, or agent for such an agency, shall pay to recipients a benefit that is equal to the ULW for the area in which the recipient resides as it relates to the U.S. Department of Housing and Urban Development Fair Market Rents areas.
Minimum Wages

Section 6
Section 6(a) Every employer shall pay to each of his employees who in any work week is engaged in commerce or in the production of goods for commerce, or is employed in an enterprise engaged in commerce or in the production of goods for commerce wages that ensure that:
1) except as otherwise provided in this section. a person working a 40 hour week would be able to minimally afford basic rental housing in the HUD Fair Market Rent Area where the employer is located.
2) The minimum wage would ensure that the minimum wage earner would spend no more than 30% of their income on housing. An employer shall pay to each employee a wage that is not less than the minimum hourly wage described currently as the federal minimum hourly wage of $5.15 an hour, or whichever wage rate is greater. An employer shall pay to each employee a minimum hourly wage that is not less than the average weekly salary divided by 40. In calculating a minimum hourly wage, hereinafter referred to as a "Universal living Wage": the average weekly salary is the average monthly salary divided by 4.3; and the average monthly salary is the fair market rent divided by .3 for the Fair Market Rent Area in which the employer is located.
The Universal Living Wage Formula
1. HUD STANDARD: No more than 30% of a person's gross income should be spent on housing.
2. HUD Fair Market Rent: (A) _________________(Efficiency Apartment) in the city/country of ______________________
3. TOTAL MONTHLY INCOME: (A) ____________(FMR divided by .3) = $ (B) _____________ monthly gross income necessary to afford basic housing.
WORK HOURS: 40 hours/week at 4.33 weeks/month = 173.33 work hours/month, 173.33 work hours x 12 months = 2080 hours/year.
6. Total gross monthly income of $ (b) ______________ x 12 months = $ ( C ) ____________ ( C ) _____________divided by 2080 hours/year = $ _______________/ hour NEW HOURLY WAGE in FMR Area of:_________________________________________________

Section 6
6(a) Local communities throughout America are permitted to hold elections whereby a vote of 51% of the registered voters in a HUD Fair Market Rent Area can then use the basic Universal Living Wage Formula and substitute the local FMR of a one bedroom apartment for that of the standard efficiency apartment in the affected FMR Area.
6(b) 1% of the local voting electorate that voted in the previous national election in the FMR Area affected, or certification of 500 signatures of registered voters in the FMR Area will be required to place the item on the local ballot during the election corresponding to the next national election.
6( C ) The economic impact affecting small businesses will be addressed with a ten year transition period. The transition from a single specified wage to a wage that is indexed to the local cost of housing using the Universal Living Wage Formula will occur using the ULW Ten Year Plan. During the transitional period employers are permitted, but not required to pay a Universal Living Wage.
Section 13.92a(1) repeal as it relates to "outside salesman"

March 14, 2003

In Texas, two pieces of proposed legislation have been added to the web site of the Texas House. HB915 is a house bill for a minimum wage in Texas, while HCR74 is a House Concurrent Resolution encouraging the federal government to enact a living wage.

To see the text of HB915 and HCR74, visit web site http://www.capitol.state.tx.us/tlo/legislation/bill_status.htm and enter the bill or resolution number in the appropriate place. You will need to choose "78th Regular Session — 2003" from the dropdown menu before entering each bill or resolution number.

We've had folks asking what kind of language might be appropriate for a national living wage bill. Using the Universal Living Wage formula, we've come up with these possible suggestions.
Would you like to see what one community (Texas) has done with Universal Living Wage concepts? Click here.

UNIVERSAL LIVING WAGE BILL
December, 2002

Definitions:

  1. “Employ” includes to permit to work.
  2. “Employee” includes any individual employed by an employer.
  3. “Employer” includes a person acting directly or indirectly in the interest of an employer in relation to an employee.
  4. “Fair Market Rent” (FMR) is a fair market rent as determined by the United States Department of Housing and Urban Development for an efficiency apartment.
  5. “Fair Market Rent Area” is the metropolitan area or non-metropolitan county, as determined by the United States Department of Housing and Urban Development, in which a Fair Market Rent applies.
  6. “Person” means an individual partnership, association, corporation, business, trust legal representative, or any organized group of persons.
Minimum Wage:

  1. An employer shall pay to each employee a wage that is not less than the minimum hourly wage described currently as the federal minimum hourly wage, which ever wage rate is greater.
  2. An employer shall pay to each employee a minimum hourly wage that is not less than the average weekly salary divided by 40.
  3. In calculating a minimum hourly wage:
    • the average weekly salary is the average monthly salary divided by 4.3; and
    • the average monthly salary is the fair market rent divided by .3 for the Fair Market Rent Area in which the employer is located.
Conditions/ Variables:

  1. The level of the wage as determined by the bedroom size selection (0,1,2,3, etc.) can be adjusted by majority vote as determined by voters in the largest metropolitan area within each FMR region.
  2. Elections for adjustment can occur at the time of each regularly scheduled national Presidential election.
  3. Elections can be triggered by a certified petitioning of 1% of the certified registered voters within the entire Fair Market Rent Area affected.
  4. EITHER: In any city where the Universal Living Wage for an efficiency apartment falls below the existing national minimum wage level as set at the time of passage of the Universal Living Wage, then the formula for that city will reflect a wage using the 1 bedroom, Fair Market Rent for that city.
  5. OR: In any city where the Universal Living Wage for an efficiency apartment falls below the existing national minimum wage level as set at the time of passage of the Universal Living Wage, then the existing federal minimum wage will remain in place.
Civil Penalty:
  1. An employer who violates section _______ or ______ is liable to an affected employee in the amount of the unpaid wages plus an additional equal amount as liquidated damages.

Business Protections/Benefits*:
Protections

While our principle concern is to prevent and end homelessness for all minimum wage workers, it is of equal concern to us that this initiative not hurt but rather protect and stabilize small businesses everywhere. It is clear that this problem did not occur overnight. To that end, we are proposing that there be a two (2) year transitional period between the time of formal adoption of the Universal Living Wage and its enactment.
Overtime, the gap between the Federal Minimum Wage and Living Wages have increased to crisis proportions in many areas throughout the U.S. During that time, business owners have been asked to provide wages that are of an inappropriately low level. They redirected those savings as they see fit... either growing their businesses or applying those savings toward personal uses. Similarly, we believe that these businesses should now be given the opportunity and the time necessary to redirect those dollars toward the very foundation of their enterprises...their employees. During the ten year plan transitional period, the employers will not be required to pay increased wages unless they choose to do so. However, at the end of the ten year period, all employers will be required to pay all minimum wage employees in accordance with the Universal Living Wage standard.
Benefits*
It is important to recognize that the difference between the existing Federal Minimum Wage and the Universal Living Wage is a considerable sum of money when calculated across the US This difference represents an incredible national resource for minimum wage consumers all of whom need the same thing...affordable housing. Presently, this affordable housing, at this economic level, does not exist. Therefore, this endeavor creates an incredible opportunity for the local construction industry across America. By responding to this need, they will be able to benefit economically while providing an immeasurable service to the entire country. Clearly, these is a true Economic Stimulus Package of enormous proportions.


* The Universal Living Wage is dynamic in the purest sense of the word. It is designed to show what salary a full time minimum wage worker would need to be paid in order to afford a certain bedroom size apartment.
We are starting off throughout the United States with an efficiency apartment. However, should a community decide as a group that it does not wish to see a single woman with a child earning a living that keeps them on the street, (for example), then the community can choose to adjust the wage paid by simply inserting the Fair Market Rent for a one-bedroom apartment etc. The community would be sliding along the bedroom size/ wage continuum. It is currently suggested that this decision making process occur no more regularly than every four years and that it be attached to presidential elections.


Note that the following sample bill encompasses the Universal Living Wage formula. It is just one example of how one community (the state of Texas) is trying to ensure that minimum wage workers can afford housing.

TEXAS HOUSE BILL #303

A BILL TO BE ENTITLED

An Act

relating to the minimum wage.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 62.002, Labor Code, is amended to read as follows:

Sec. 62.002.  DEFINITIONS. In this chapter, unless the context requires a different definition:

  1. "Agricultural piece rate worker" means a person:
    1. who is employed as a hand harvest worker in agriculture; and
    2. whose pay is computed on a piece rate in an operation for which
      the pay has been and is customarily and generally recognized as
      having been computed on a piece rate in the region of employment.
  2. "Agriculture" includes:
    1. farming in all its branches;
    2. cultivating and tilling the soil;
    3. dairying;
    4. producing, cultivating, growing, and harvesting an agricultural or
      horticultural commodity, including a commodity defined as an
      agricultural commodity by Section 15 (g), Agricultural Marketing Act
      (12 U.S.C. Section 1141j(g));
    5. raising livestock, bees, fur-bearing animals, or poultry; and
    6. any practice performed by a farmer or on a farm as an incident to
      or in conjunction with farming operations, including:
      1. forestry or lumber operations;
      2. preparation for market; and
      3. delivery to storage, market, or a carrier for transportation to market.
  3. "Commission" means the Texas Workforce Commission.
  4. "Employ" includes to permit to work.
  5. "Employee" includes any individual employed by an employer.
  6. "Employer" includes a person acting directly or indirectly in the interest of
    an employer in relation to an employee.
  7. "Fair market rent" is a fair market rent as determined by the United States
    Department of Housing and Urban Development for a one bedroom apartment.
  8. "Fair market rent area" is the metropolitan area or nonmetropolitan county,
    as determined by the United States Department of Housing and
    Urban Development, in which a fair market rent applies.
  9. "Person" means an individual, partnership, association, corporation,
    business trust, legal representative, or any organized group of persons.

SECTION 2. Section 62.003 (b), Labor Code, is amended to read as follows:

(b) An earnings statement must be signed by the employer or the employer's
agent and must show:

    1. the name of the employee;
    2. the rate of pay;
    3. the total amount of pay earned by the employee during the pay period;
    4. any deduction made from the employee's pay and the purpose of the deduction;
    5. the amount of pay after all deductions are made; and
    6. the total number of:
      1. hours worked by the employee if the employee's pay is computed
        by the hour; or
      2. units produced by the employee during the pay period if
        the employee's pay is computed on a piece rate.

SECTION 3. Section 62.051, Labor Code, is amended to read as follows:

Section 62.051, MINIMUM WAGE.

  1. Except as provided by Sec. 62.057, an employer shall pay to each employee
     a wage that is not less than the minimum hourly wage described
    by Subsection (b) or the federal minimum hourly wage,
    whichever wage rate is greater.
  2. An employer shall pay each employee a minimum hourly wage
    that is not less than the average weekly salary divided by 40.
  3. In calculating a minimum hourly wage:
    1. the average weekly salary is the average monthly
      salary divided by 4.3; and
    2. the average monthly salary is the fair market rent
      divided by .3 for the fair market rent area in which
      the employer is located.

SECTION 4. Section 62.201, Labor Code, is amended to read as follows:

Section 62.201. CIVIL PENALTY. An employer who violates Section 62.051,
62.052, 62.053, 62.054 or Subchapter C is liable to an affected employee
in the amount of the unpaid wages plus an additional equal amount as liquidated damages.

SECTION 5. Sections 62.055 and 62.056, Labor Code, are repealed.

SECTION 6. This Act takes effect September 1, 2001.

 

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