Minimum Wage Goes Up Today! Buy Yourself 0.175 Gallons of Gas!

The Federal minimum wage lurches up 70 cents today, from $5.85 to $6.55. As the title mentioned, that's about 1/5 a gallon of gas at $4/gallon. By next year, the minimum wage will be at a respectable $7.25 an hour. But given the rapid deterioration of the dollar and consumer confidence in a tailspin, the idea of the MW going "up" may be a little misleading. From the AP:

Last week, the Labor Department reported the fastest inflation since 1991 — 5 percent for June compared with a year earlier. Energy costs soared nearly 25 percent. The price of food rose more than 5 percent.

So the minimum wage hike is "a drop in the bucket compared to the increases in costs, declining labor market, and declining household wealth that consumers have experienced in the past year," Lehman Brothers economist Zach Pandl said.

The new minimum is less than the inflation-adjusted 1997 level of $7.02, and far below the inflation-adjusted level of $10.06 from 40 years ago, according to a Labor Department inflation calculator.

$10.06 in 1968?! I always wondered how those slackers bought all the doorway beads and pot.

But the new wage level isn't just too low to help the workers. It's too high to help small businesses. The AP again:

David Heath, owner of Tiki Tan in College Station, Texas, said the increase will force him to raise prices for his monthly tanning services by about 12 percent. Tiki Tan had been paying its employees $6 per hour.

"There just isn't any room for profit, and so this is why prices will have to go up," he said, citing the wage increase and higher fuel costs. "I have to recoup those costs."

The increase in the minimum wage could push food prices even higher by rising the pay for agricultural workers, said Brian Bethune, chief U.S. economist at consulting firm Global Insight.

But he said he did not expect the change to have a major impact on the economy because recent increases in productivity, which enables companies to produce more with fewer workers, are keeping labor costs in check.

Wha? Seriously? Did the chief U.S. economist at Global Insight just say the only thing holding the economy together is unemployment? Awesome.

If anybody - anybody - out there has a solution to this, please tell me. Or just call the President. Scratch that - tell me. I want this to get done soon.

More After the Jump...

Wal Mart to pay $49 Million More - Official Response: "Meh."

The latest decision in Wal-Mart's ongoing legal battles with its employees is in, and this one is probably going to increase the legal flies the retail giant will be swatting at in the near future.

A Pennsylvania judge has tacked $49 Million in attorney's fees onto a $141 Million judgment for unpaid overtime against the nation's second largest employer. The plaintiffs (187,000 of them) were awarded $141 Million earlier this year.

This has got to be tough for a retailer that doesn't even like paying its own attorney's full price.

Just based on its two recent wage-and-hour suits, Wal Mart is down about $353 Million, and it is marking a distinct shift in employment litigation, with major L&E firms noting the biggest danger to employers is no longer discrimination, but wage and hour class actions.

Wal Mart, of course, is dealing with both.

On top of this $181 Million, and the California lunch-break judgment earlier this year for $170 Million, Wal Mart is facing two gender discrimination class actions, one of which is currently open to 1.6 million current and former female employees (that makes it the largest civil rights action in history, for anyone keeping score), a suit over its refusal to add birth control to its health benefits, and a bevy of single-plaintiff actions too long to list.

More info can be found on the company's Wikipedia page. The Arkansas giant is appealing all of the judgments, of course, but they're probably not reeling as much as you'd think - Wal Mart's 3d Quarter revenues clocked in just under $3 Billion. Yeah, with a B.

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HEADS UP: Wage Garnishment Changes

[ed. note: Any time we find something that might be of note to employers or practicioners we'll do our best to put it up here. We'd really like to have a catchy title to accompany all of these snippets, but the clever engine's not turning over for us today. If you've got a good label, title, etc. drop us a line. In the meantime...]

Heads up to Illinois employers - the State's changing wage deduction rules.

The Governor’s getting a piece of proposed legislation on his desk this morning that would alter post-judgment enforcement. The changes notably include:

- Removing the judicial discretion in wage-deduction orders – deductions would automatically be the lesser of (a) 15% of the weekly gross income or (b) the amount of net income above 45 times the current minimum wage (which just went up to $7.50).

- Allowing judgment creditors the option of taking conditional judgments against employers who stop deducting wages without a valid excuse, but the bill would also require creditors to certify the remaining balance in garnishment proceedings before the employers are obligated to pay.

- Changing the employer fee from either $12 or 2% to just 2%. No option.

If the bill gets signed it will go into effect Jan. 1, 2008.

Illinois Senate Bill SB0229

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