Pennsylvania GOP Senator Rick Santorum, the hero of Lackawanna County, proposed an amendment to the pending bankruptcy "reform" bill (S.256) that could have actually lead to more Americans going broke. The bankruptcy bill, a big priority for Republicans and the credit card companies who finance their campaigns, is intended to make it more difficult for people to eliminate medical and other personal debts by declaring bankruptcy. And even worse, hidden in the Santorum Amendment were a number of provisions that could actually have resulted in companies being able to hire workers for no pay whatsoever. This is going to sound like an urban legend, the sort of thing that gets passed around by email, citing "Senate Bill 602P" or some such similar garbage. But it was true, very real, and could have become law faster than you can say "Class Action Fairness Act of 2005," or, in this case an amendment to the "Bankruptcy Abuse Prevention and Consumer Protection Act of 2005," intended "[t]o promote job creation, family time, and small business preservation in the adjustment of the Federal minimum wage."
The short description and the main selling point made it sound like good legislation. The Santorum Amendment, the actual text of which we had trouble finding, proposed to raise the minimum wage by $1.10 per hour -- a change which is arguably well overdue. The last minimum wage raise was eight years ago. Since then, inflation has shaved 19.4% off the value of those wages, and minimum wage workers, who currently earn $10,700 a year, now find their income a full $5,000 below the poverty line for a family of three. During those same eight years, Congress raised their own salaries seven times, by a total of $28,500 per year.
So the minimum wage raise looked like a pro-worker proposal. But the AFL-CIO called it "a sham," because hidden in the fine print of the Santorum Amendment were a series of provisions that would cut wages for millions of Americans to as little as zero. How? There were two provisions which spelled disaster for the workers who could least afford disaster.
First, the amendment exempted any business with revenues of $1 million or less from regulation. The current exemption is $500,000. The difference would have meant almost seven million workers losing their protections under federal law.
Second, the amendment severely limited the right of tipped workers to get wages paid by their employers. The FLSA (Fair Labor Standards Act) currently specifies that states have the right to impose higher wage standards than those under the FLSA. The Santorum Amendment proposed to end that when it comes to tipped employees. Moreover, it actually proposed to ban states from requiring employers to pay tipped workers with any sort of guaranteed wage. Currently, tipped workers are guaranteed just $2.13 per hour in wages under the FLSA, and they can be required to credit their tips against the FLSA minimum. Most states have higher minimum wages for tipped employees, and do not require tip offsetting. California, for example, applies the same minimum wage to tipped employees and non-tipped employees alike, with no offsets for tips.
Under the Santorum Amendment, states could not pass or enforce laws requiring employers to pay wages to tipped employees. And many employers, such as individual restaurant owners, would be exempt from the federal minimum wage because they don't reach that $1 million revenue level. The potential for abuse would be tremendous. Restaurant workers make no tips while performing "side work," the extra work that a custodian or other full time employee might perform, but which restaurants often have servers, bussers and bartenders divide: tasks like cleaning drains, sorting utensils, folding napkins, collecting laundry, washing floors and similar menial tasks. Under the Santorum Amendment, that work would be essentially free. Do you think employers would take advantage of it? And paid breaks? Forget them. The labor would be free already anyway. Breaks would just mean you have to stay later to complete your remaining unpaid tasks once the tipping customers have left for the day.
There were several other horrible provisions. The amendment would also have increased the revenue level at which businesses would become subject to fines under various health and safety laws, to $7 million. Working conditions that have been barred by federal laws for the past several generations could have made a comeback. While this would mean that American businesses could again compete with Bangladeshi sweatshops, this is not what most Americans wanted when they cast their votes for the candidates who promised more jobs in their communities.
Finally, the 40-hour work week was to be eliminated from federal protection, to be replaced with 80-hour work "two-weeks." A company could work employees 50 hours a week at straight time, and avoid liability for overtime pay by having the employees work just 30 hours the following week. Supposedly, this is a "flexibility" that workers want. We haven't heard the clamor, however.
The Santorum Amendment quietly came up for a vote last night and was soundly rejected 61-38 (with Senator Mikulski not casting a vote). Its defeat is good news for America's hardworking poor. If you agree, you can send Senator Santorum an email by visiting his website. Tell him you aren't sorry he lost, and he should be ashamed of himself for even trying. In his defense, Santorum offered this pathetic spin: "I would hope candidly that we didn't pass either of these at this time," he said, referring to both his amendment and one proposed by Ted Kennedy. Of course, that "candid" hope didn't prevent him from introducing his amendment or voting for it.
Meanwhile, the bankruptcy bill continues to be debated, focusing largely on a controversy over whether abortion protesters should be allowed to file bankruptcy to avoid court fines for contempt.