implementation of portland s minimum wage ordinance need for a community based organization approach

Michael Havlin There is a gap between what the city government of Portland Maine perceives and defines as successful minimum wage enforcement and what is actually occurring in workplaces

IMPLEMENTATION OF PORTLAND’S MINIMUM WAGE ORDINANCE: NEED FOR A COMMUNITY BASED ORGANIZATION APPROACH?

Michael Havlin

There is a gap between what the city government of Portland Maine perceives and defines as successful minimum wage enforcement and what is actually occurring in workplaces The city is taking an onerously complaint-driven approach to enforcement that disregards the potential for a disconnect between violations occurring and violations being reported Workplaces are fraught with institutional barriers like confusion, intimidation, and misinformation that prevent workers from knowing or exercising their rights Outreach conducted collaboratively with the Southern Maine Workers Center has shown that these barriers have caused a number of violations of Portland’s minimum wage ordinance that are going unreported.

Introduction Amidst a wave of local wage activity across the nation, Portland, Maine, has become one of the most recent cities to implement a city minimum wage Passed

by the city council after two years of deliberations, Portland has settled on a phased in $10.68, which started at 10.10 on January 1, 2016 Although counci-lors have heralded the policy as a success, some in the community have voiced concerns over implementation and enforcement mechanisms

Applying the analytical frameworks of the National Employment Law Pro-ject [NELP], Professor Stephanie Luce, and other local labor law researchers, this paper uses ethnographic research and other qualitative methods to identify how Portland, Maine is implementing its minimum wage ordinance and where policy failures may be occurring By conducting media analysis, interviews with city officials, interviews with Portland workers, and participatory action out-reach with the Southern Maine Workers Center, this analysis will attempt to answer the following question and sub-questions:

 Is there a gap between the city’s perception and definition of enforcement success and what is actually occurring in workplaces within the city of Port-land, Maine; is there a role for the Southern Maine Workers Center to bridge that gap?

WorkingUSA: The Journal of Labor and Society · 1089-7011 · Volume 19 · December 2016 · pp 533–551

V C 2016 The Author WorkingUSA: The Journal of Labor and Society published by Immanuel Ness and Wiley Periodicals, Inc This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in

 How did Portland’s minimum wage ordinance come to fruition?

 How is the minimum wage being implemented? Are there elements of an effective policy that are missing?

 Are businesses adhering to the minimum wage ordinance?

 Are violations being reported to the City Manager?

 How do employers treat and respond to employees who voice their concerns about violations and how do employees respond?

As the analysis will show, the city’s overly onerous complaint-driven system has led to a disconnect between the complaints it is receiving and the actual vio-lations occurring in workplaces A city government that is too focused on com-plaints and unwilling to do proactive outreach with the community is missing the actual violations that are occurring on the ground Outreach with the South-ern Maine Workers Center revealed that the low wage workplaces in Portland can be fraught with institutional barriers that cause violations of the ordinance and prevent workers from exercising their rights

Literature Review

A significant determinant of local labor law success is the strength of local enforcement mechanisms (Dietz, Levitt, and Love 2014; Luce 2004; Luce 2005) Analyses on Santa Fe and San Francisco, where enforcement mechanisms are strong, have shown that local minimum wages1 are effective at increasing wages without affecting employment; however, in Washington DC the ordi-nance (until recent reforms) was so toothless that the “share of workers earning below the new minimum wage actually increased after the law went into effect (Schmitt and Rosnick 2011, 9).” And in the case of Albuquerque, where enforce-ment provisions are weak, there are numerous news reports of workers com-plaining of wage theft with no recourse (Jamieson 2013; Sandlin 2015)

Political conflicts over enforcement standards have created a wide range of minimum wage implementation levels in cities San Francisco, for example, after

a decade of tireless advocacy by community organizations, would eventually progress to become the gold standard of enforcement (Dietz, Levitt, and Love 2014) In San Francisco the city’s Office of Labor Standards Enforcement [OLSE] employs dozens of staff and a large budget to enforce ordinances aggressively Unfortunately, San Francisco is an exception; the majority of cities with local wage laws failed to implement them sufficiently (Luce 2004)

In response to the patchwork of inconsistent local ordinances and varied local labor law success, the National Employment Law Project has begun for-mulating a series of best-practices that echo and consolidate what previous researchers have found (Dietz, Levitt, and Love 2014; Ichikawa and Smith 2014; Koonse et al 2015; Luce 2004, 2005; National Employment Law Project 2015a-c; Weil and Pyles 2005) Because of other existing literature, and

indications from initial data collection, this paper will be most oriented towards two features of NELP’s framework: (1) dedicated municipal resources, and (3) community outreach

As seminal research from Stephanie Luce on prevailing wage2ordinances has shown, proactive outreach that engages the community becomes crucial in enforcing local labor laws because of the inherent flaws in a complaint driven system (Luce 2004, 2005; Weil and Pyles 2005) For a number of reasons, like intimidation in the workplace, confusion regarding one’s rights, subversion on the part of employers, and unenforced whistleblower protection, complaint driven systems are far less effective than proactive investigatory ones Stephanie Luce, a sociologist at the City University of New York, has documented exten-sively how local labor laws are typically only effective when there is a proactive, community-engaged, approach This paper is distinguished from Luce’s work

by focusing exhaustively on one city, which allowed for detailed examination of how violations manifest themselves in the workplace, specific policy failures, and the specific dynamics of a minimum wage

As stated succinctly by enforcement researcher David Weil (2010, p 57):

“networks matter!” Luce (2004), Dietz, Levitt and Love (2014), and Ichikawa and Smith (2014) have shown that unions and non-governmental organizations are instrumental in connecting wronged workers to city enforcers and attorneys Unions and community based organizations are able to use informal networks, friendships, trust, and customs to bridge the gap between formal enforcement mechanisms and the internal culture and network of the work place Unfortu-nately, unions, which historically served the role as the informal network between federal labor enforcers and workers, are experiencing all-time lows in membership (Weil 2010)

In the absence of unions, or in compliment to unions, Fine (2006) docu-ments how Workers Centers have been instrumental in providing voice for low wage workers and filling the information gap between federal and state policies and workers In Worker Centers: Organizing Workers at the Edge of the Dream, Fine (2006) shows how Workers Centers are intersectional workers advocates that are able to organize workers to fight for policy change, and network around policy enforcement and attorney assistance (Fine 2006)

Interestingly, in addition to the empirical work on contemporary policies, Seltzer’s (1995) theoretical bounded-rationality model on minimum wage policy formulation provides a role for labor organizations Applying a multi-equilibria model that he developed using data on pre-FLSA (pre-1937) minimum wages, Seltzer shows that under normal conditions there is no equilibrium tendency for policy makers to create strong implementation and enforcement policies or plans The rational, vote-maximizing, elected official can be influenced by voters

to pass a law; however, due to information barriers only special interest groups can affect the implementation of the law The result is, without substantial lob-bying by labor advocates, a policy equilibrium that has an ineffective minimum wage law Luce also found, in the local living wage context, that the contentious-ness of a minimum wage campaign can influence implementation success

Synthesizing the above perspectives, one can conclude that there is a role for workers centers to influence the enforcement and implementation of local mini-mum wage ordinances; however, there has been little to no research on this spe-cific arrangement Fine (2006) shows the powerful potential for workers centers to uniquely influence policy and provide resources generically Luce (2004) shows that unions and other labor organizations, not workers centers, can influence liv-ing wage enforcement And all of the perspectives show the importance for lobby-ing, organizlobby-ing, and monitoring by labor advocates for successful policy

Some researchers, like Weil (2010) and NELP (2010), suggest and recom-mend that workers centers have the potential to effectively collaborate with enforcers and attorneys, and Ichikawa and Smith (2014) mention that San Fran-cisco has experimented with worker centers, but there is little evidence on how these relationships could unfold Due to the lack of union membership in most

of the country, and the on-the-ground nature of workers centers, they could prove instrumental to the enforcement of municipal minimum wages

Using the analytical frameworks laid out by Stephanie Luce, the National Employment Law Project, and in passing David Weil, Seltzer, and Fine, this analysis will conduct participatory action ethnography and other qualitative methods to critically assess current implementation of Portland, Maine’s mini-mum wage ordinance The analysis will look to assess the quality of the city’s statutory construal, current enforcement, and the role that the Southern Maine Workers Center has played, and can play, in the ordinance’s enforcement

Methodology Document Analysis The Portland Press Herald database on Proquest was searched for text con-taining the terms “minimum,” or “wage,” between the dates of January 1, 2014 through October 2015 and then the results of the search were selectively reduced

to accumulate only those articles that focused, or significantly remarked, on local minimum wage issues in Portland In total the final search and filter resulted in

121 (N 5 121) articles, op-eds, columns, and letters to the editor on local mini-mum wage issues The media documents supplement the analysis of the city’s approach, but also serve to shed light on the dynamics of the campaign to increase the minimum wage As Luce and others have shown, the contentious-ness of a campaign can be indicative of future enforcement quality The topics of articles covering the local minimum wage were also examined For documents concerning city policy, the city’s website was perused for council minutes, ordi-nance drafts, budgets, and FAQ’s regarding the minimum wage

Interviews with Officials

In total seven (N 5 7) policy leaders or experts participated in phone, per-sonal, or email interviews Two city councilors (n 5 2) and former Mayor

Michael Brennan (n 5 1) participated in phone or email interviews The City Manager Jon Jennings (n 5 1) participated in a phone interview and referred me

to one another staff member, Mike Murray (n 5 1) who participated in email and personal interviews The State Department of Labor FOAA administrator Julie Rabinowitz (n 5 1) also participated in phone and email interviews Finally, Andy Schmidt (n 5 1), a Portland attorney specializing in wage and hour law consulted my work and provided me with data

Worker Center Participant Observation and Worker Interviews

Outreach was conducted from early January 2016 through March of 2016 Outreach was conducted with the low wage community by going to bus stops, soup kitchens, libraries, idle places of work, and labor events to meet new low wage workers and survey them about issues happening in their workplace Short structured interviews were used to screen participants for full length semi-structured interviews In total, thirty hours of outreach were conducted and fif-teen hours of other participant observation was conducted In total, thirty-two individuals were solicited for structured interviews, twenty-two (N 5 22) of those solicited completed full interviews, and four (n 5 4) of those twenty-two were interviewed for additional semi-structured questioning based on their ini-tial responses (See Table 1 for summary of methods)

Results and Analysis

The analysis examines the enforcement of Portland’s minimum wage ordi-nance using three main indicators: (A) the local campaign surrounding the mini-mum wage, (B) the policies and positions of policy makers, and (C) the actual conditions and experiences of Portland workers The first two indicators, the campaign (A) and the city’s policies (B), will serve as a signal to the potential for

Table 1 Summary of Methods

Document

Analysis

The city ordinance and

related city documents.

Utilizing all that is publicly available through cooper-ative means, and if neces-sary with the use of FOAA requests.

To identify the gaps within the interpretive commu-nities to answer the research questions by synthesizing the perspectives.

Various publications in the

Portland Press Herald Interviews City officials A combination of outreach

and snowballing from respondent

recommendations.

Low wage workers.

Labor lawyers.

Labor activists.

Participant

Observation

Interactions between labor

activists and workers.

This will be collected throughout the outreach process, and at Southern Maine Workers Center events.

Processes for filing

complaints.

Activities of businesses who

are violating ordinance.

enforcement issues, while the experiences of workers (C) will serve to show whether or not that potential for inefficacy has become an actual reality As the analysis will show, a contentious minimum wage campaign and moderate imple-mentation by the city led to a disconnect between what the City of Portland measured as successful implementation and what was actually occurring in workplaces

(A) The Campaign Establishing a municipal minimum wage in Portland was an idea initially proposed by Mayor Michael Brennan in his State of the City speech in January

of 2014 Brennan, who would eventually propose a phased in minimum of

$10.68, championed and shepherded the ordinance’s formulation from its incep-tion to its implementaincep-tion over a twenty-four-month process The process would be delayed by strong business opposition, complicated conversations about the interaction of state and city law, the issue of tipping, competing mea-sures by the Green Party, and electoral politics Review of media reports and editorials from January of 2014, when the Mayor’s efforts were announced, through October of 20143 reveal that the proposal to increase the minimum

Table 2 Article Topic and Sentiment (January 2014 through October 2015)

Sentiment/topic City’s Proposal Ballot Initiative Mayoral Race Both Proposals Total

Graph 1 Examination of Topics (January 2014 to March 2016)

wage was highly contentious, and conflated with other issues, and so the public may not have had an opportunity to fully vet the details of enforcement policies, and workers may not have fully understood the rights each proposal allowed them

Over the course of 18 months, from January 2014 through October 2014, there were N 5 121 articles, op-eds, and letters to the editor in the Press Herald that were about, or touched on significantly, Portland’s local minimum wage proposals Activity around the proposals increased during key events like public forums, committee meetings, council meetings, and voting periods The spread

of sentiment regarding the proposals, and the conflation of the council’s mini-mum wage ordinance with the mayoral race and the alternate proposals, shows that the various initiatives were highly contentious and conflated with larger issues (see Table 2) The lengthy, iterative, and contentious nature of the coun-cil’s deliberations, and the high volume of media coverage from a wide range of perspectives suggest that the ordinance had strong opposition but was eventually pushed through the council

Proponents of the ordinance offered ideas of economic justice, the demand side benefits, and the rising cost of living While opponents, the largest of which were Greg Dugal of the Maine Restaurant and Innkeepers Association and Chris O’Neil of the Chamber of Commerce, painted a picture of fire and brimstone repercussion Despite this lengthy process, only four (n 5 4) media articles sig-nificantly mentioned enforcement provisions Analysis of news articles also reveals that the Portland ordinance became conflated with other wage-related issues in the city and across the state (see Graph 1).4

(B) The Policy: Statutory Construal and the City’s Approach

Before applying Luce’s grading framework, it is important to lay out what the city’s approach to enforcement is from a nuanced perspective Although the ordinance does not specify the obligations of the city, the enacted procedures of the city and the city’s interpretation of the ordinance shows that the minimum wage will be enforced through a purely complaint-driven system that puts the burden of compliance on employers and employees, and will be evaluated by the city on the reception and processing of complaints As the analysis will show, there is a high potential for implementation issues due to three interacting themes: a shifting burden of enforcement, the city’s “wait and see” approach, and the city’s mistaken conceptualization of enforcement “success.” The burden

of enforcement was shifted onto employers and employees, and the city has focused too much on waiting for complaints rather than finding violations Shifting burden of enforcement Examining the actual text of the ordinance, one can immediately see where the burden, responsibility and trust of enforcement lies: businesses and their employees Although the ordinance broadly authorizes the City Manager to do a number of things, like fines, investigations, and payroll review, it does not explicitly obligate the City Manager to do anything beyond

“enforce the ordinance,” and does not provide funding for anything it authorizes (City of Portland City Council 2015a, 7) Conversely, businesses are required and expected to be the entity that informs workers of their rights, keep records

of pay, and comply with city requests One can see this in the ordinance by observing the uses of “shall” and “may” within the text; employers “shall main-tain payroll records” while “the city may investigate” a complaint (City of Port-land City Council 2015a, 7-8) The underlying assumption seems to be that if employers and employees are informed, then they will act to rectify any prob-lems by informing the city If the City Manager does not exercise his/her/their authority to actively enforce the ordinance, then enforcement is left to employ-ees and their employers

Interviews with city officials reveal that the city administration will not be exercising any authority to take an active role in enforcement, and so indeed enforcement of the ordinance relies on employees and their employers When asked about outreach and investigations Mike Murray, the city official

designat-ed by the City Manager to process complaints, explaindesignat-ed in an email that the ordinance “clearly states it is a complaint driven system” and “outreach with workers is the responsibility of employers.” In a phone interview Mike went on

to indicate it will be incumbent upon the employee to show that they were wronged and that they must do so by filing a written complaint In phone inter-views and emails, the city manager and Murray indicated that the city would not

be taking proactive steps to monitor payroll information at businesses City staff also indicated that workers would be encouraged to consult with private lawyers

to pursue private action

The burden of enforcement being put on workers is, of course, consistent with complaint driven systems; however, Portland’s ordinance places greater burdens on employees then had been in place under state law Email exchanges and phone interviews with Julie Rabinowitz, the Freedom of Act (FOAA) Administrator at the Maine Department of Labor, revealed that Portland work-ers may become lost in a regulatory limbo Rabinowitz stated that the Maine DOL will no longer process complaints filed from workers in Portland, even those complaints reporting violation of the state’s 7.50 minimum wage, because the city is now, in her eyes, no longer the DOL’s proper jurisdiction for enforcement

This further burdens workers because, previously, under DOL regulations anyone could prompt a DOL lead investigation through an anonymous phone call

or tip about an employer even if they gave no indication of who they were or if they worked there; however, now, according to city administrators and the ordi-nance, employees must provide written statements and documentation to the city which may or may not lead to an investigation by the city staff When prompted in

a phone interview, Rabinowitz expressed concern that the complaints she receives from Portland workers will get lost in the shuffle between the anonymous phone call to her and the written complaint to the city government Rabinowitz was actu-ally not even aware of who was processing complaints at the city, expressing frus-tration about lack of communication between the city and her

Planning to ‘wait and see,’ waiting and seeing as planning Councilors and city administrators have expressed a desire for an enforceable ordinance to succeed; however, largely due to budgetary and political concerns, both sides of city gov-ernance have decided to “wait and see” if enforcement is a problem before the city funds and exercises its broad authorizations Both city councilors and city staff used the “wait and see” approach during both the planning phase and as the barometer with which to monitor their performance

Although the Finance Committee deliberated enforcement implications as early as December of 2014 and the city’s own corporation counsel recommended

at least $50,000 be set aside for enforcement, when the entire council passed the ordinance in July of 2015 it did not approve funding, stating that until the mini-mum wage was implemented it would be “impossible to estimate how violations would affect City regulatory expenditures” (City of Portland City Council 2015b, 8; West-Chuta 2014) Immediately after the ordinance was passed, city spokeswoman Jessica Grondin indicated it was too early to criticize the city’s enforcement procedures, stating that city officials could exercise their authority later “if they wanted to set something up more official (Anderson 2015, B2).” Spokeswoman Grondin went on to indicate, as worded by the Press Herald, “if the new minimum-wage requirement does generate a significant number of complaints there is the possibility the city would add a designated staff person (Anderson 2015, B2).”

As the ordinance evolved from its initial incarnation, councilors continued

to take the “wait and see” approach to planning around enforcement In Septem-ber of 2015, when amending the ordinance was being considered, the Press Her-ald reported that Mayor Brennan indicated that “the city has no immediate plans

to hire someone to enforce the ordinance (Billings 2015, A.1).” When contacted for clarification, Brennan, now the former Mayor, stated “well we were taking the wait and see approach” that if there were complaints the city would hire staff When asked about her thoughts on outreach as an enforcement idea in March of

2016, City Councilor Belinda Ray stated “I guess I would be inclined to give this some time to play out and see if any complaints are registered rather than engage

in a vast outreach at this time.”

In addition to the council, the city staff also took the “wait and see” approach

of planning In September of 2015, after the City Council revised the tipped wage portion of the ordinance, the City Manager said that “if we’re receiving a significant number of complaints in the first quarter of [2016], we would move immediately to bring someone on board (Billings 2015, A.1).” In a phone inter-view in October of 2015, the City Manager confirmed that the city was continu-ing to take a wait and see approach; that they were developcontinu-ing plans for administration and they would be asking the council for some funds to send out

a poster that employers would be required to post, and then wait to see if com-plaints arrived in the new year

The New Year revealed, though, that the mailing of posters would not occur, and that plans around the ordinance would continue to equate to waiting and seeing Interviews with city staff show that what had initially been planned,

providing posters to employers, devolved, due to budgetary concerns, into mail-ing a document that directed employers to a website where the poster could be printed out As 2016 progressed, the city administration continued to operate under the presumption that the workers had been sufficiently notified, and that

if there are any enforcement issues then they would reveal themselves as com-plaints In the city’s eyes, while they “waited,” if there were no complaints to

“see” then the ordinance was implemented successfully

The city’s definition of enforcement success Although the “wait and see” approach initially sounds reasonable, one has to ask what exactly the city is expecting to

“see?” A minimum wage ordinance should not be judged on the number of com-plaints it generates, but instead the number of violations it generates The state-ments and interviews surrounding enforcement success quickly reveal that Portland’s policy leaders are judging the need for enforcement funding on the number of complaints that are being reported, not the number of violations Upon asking city officials about any issues regarding enforcement, the first response they have is to reference the absence of complaints and not being aware of compliance issues The litany of policy leaders who deferred to “wait and see” if there are complaints before committing resources reveals a “no news is good news approach.” When these policy leaders are pressed about the potential disconnect between complaints and violations, they rely on the presumption that employers and employees are well informed and so therefore any violations would result in complaints The dominant view of the policy leaders in Portland is that no news is good news; a lack of complaints must mean a lack of violations

However, when one considers the increased burden of enforcement onto employees and employers, the interest level of the city to engage with the com-munity proactively, and the lack of committed resources, one cannot help won-der if there is a chicken and the egg problem; violations may only become complaints if there is proactive enforcement, but the city will not proactively enforce the ordinance unless there are complaints

Luce’s grading scheme Application of Luce’s grading scheme is important because it serves as checklist of best practices to gauge a city’s performance; however, in the context of a minimum wage ordinance (as opposed to a prevail-ing or livprevail-ing wage) certain parts of the framework become more important than others Because most workers covered by the ordinance are not contingently employed by the city, as the case with prevailing wage ordinances, aspects that are more proactive in nature become more important To account for this, some augmentations to the scheme were made, and the narrative below dis-cusses certain nuances One new criteria, “complaints are easy to file,” was added to Luce’s framework in the monitoring section Additionally, the use of half points was applied to some of Portland’s criteria because of certain nuances Below is a table and narrative addressing the portions most relevant to Portland (Table 3)