The minimum question

by David Forbes August 8, 2015

As pushes for higher wages increase, can Asheville pass its own minimum wage? A look at the legal questions and political battles over a key issue

Above: Raise Up for 15 protesters near the Biltmore Avenue Hardee’s in April. Partly inspired by that regional labor movement, some locals are now pressing for a citywide minimum wage as the topic of local pay gains increasing attention. File photo by Max Cooper.

Last October, local left activist Martin Ramsey approached the Asheville City Council podium and called on the city’s elected leaders to pass a living wage, not just for its own employees, but as a requirement for all businesses operating in the city of Asheville.

Ramsey, a former mayoral candidate who also works downtown as a waiter (and occasionally writes opinion columns in the Blade), said he felt the time had come to require businesses in Asheville to pay a wage their workers could live on and drawing on a white paper from the N.C. Justice Center, added he felt cities had the ability to do so.

“Does Asheville press forward with meaningful progressive economic policy designed to aid a service and hospitality workforce that numbers in the many thousands? Or do we declare defeat before attempting anything worthwhile?” Ramsey asked Council, asserting that if Asheville’s elected officials didn’t act, the public should press forward to put such a measure on the ballot.

The proposal didn’t mention a specific number, but the local living wage is currently calculated at $12.50 for employers that don’t offer health insurance. At the end of that meeting, Council member Gordon Smith asked City Attorney Robin Currin to research the matter.

Minimum wage increases are a topic of major political movements across the country right now, with cities like Seattle, San Francisco and Los Angeles all passing laws requiring businesses within their borders to pay more to their workers. It’s not just left-leaning metropoli either: last year statewide hikes in the minimum wage passed in conservative states like South Dakota, Nebraska and Arkansas. There’s also been major pressure from labor groups, especially in the fast food sector, to push for a hike to $15 an hour and a union to back it up, a movement that’s gained some traction locally. Wages have been largely stagnant for decades, and the aftermath of the recession has only made things harder for many.

Asheville’s no exception: wages here are particularly low — up to $400 a month under the state average — costs of living are rising rapidly and the combination leaves many here more desperate than ever.

“As a medium-sized city we ought to at least be somewhere approaching the average and it didn’t seem like we were in any way shape or form,” Ramsey tells the Blade of his reasons for pushing the proposal. “People make excuses for that sort of thing all the time, they say ‘you’re not producing enough GDP with your job’ — the C-T wrote an article on that recently — or ‘the tourist industry is not generating enough income’ when really it’s generating an incredible amount of income, just not for the people that make it possible.”

After researching efforts around the country, a previous attempt to pass a minimum wage in Greensboro and the Justice Center’s paper on the legalities of the issue, he felt it was time to push forward. “I’ve been following Fight for 15 and low-wage organizing across the country, which has been very inspiring. I don’t see any reason that we shouldn’t be attempting to join the leaders of that wave and do something in our ostensibly left-leaning city.”

Since Ramsey presented the proposal in October, there’s also been plenty of debate here, with assertions that such a measure is legally impossible minus changes in state law.

But the question of a minimum wage in Asheville — or any city in North Carolina — is an open one, with perspectives among experts on state law differing. The issue brings up key debates about the power of local governments and the best tactics for pushing up wages in a city where they still remain strikingly low.

A question of power

About a month after Ramsey’s presentation, Currin sent a memo back to Council — Smith later released it — asserting that she firmly felt that Asheville couldn’t pass its own minimum wage and that such a step was not a legally valid option

At the heart of this debate is a much-cited difference between how cities are treated under North Carolina law and how they’re treated in some other states. Namely, in “home rule” states — which California and Washington are to some degree — cities have much wider powers to enact local legislation. In North Carolina, however, cities are considered to have the powers allowed them by state government.

But the state legislature’s power, while considerable, isn’t absolute. The general assembly’s delegated an array of powers to cities, and the state constitution also makes some further restrictions on what state legislators can do when it comes to local laws. Included in the powers currently allowed cities are the ability to make rules to protect health, safety or welfare — and do what’s necessary to enforce them — collectively called its “police powers.”

Those powers also have some limits. A 2003 court case, Williams v. Blue Cross Blue Shield, struck down an Orange County discrimination ordinance and established that local governments couldn’t create new ways for people to sue their employers. A more recent decision in the King v. Town of Chapel Hill case last year saw the state Supreme Court uphold the right of Chapel Hill to regulate towing companies under its police powers but struck down some other restrictions and a rule capping the fees the companies could charge.

Last year a state “regulatory reform” law, HB74, struck down rules passed by Durham and Asheville that required businesses contracting with the city to pay a living wage.

But, the white paper notes, the ruling on Chapel Hill’s towing ordinance “distinguished between a local employment ordinance allowing citizens to sue employers, which is not allowed, and an ordinance in which the local government can impose civil penalties on an employer who violates such an ordinance, which is allowed.”

So the N.C. Justice Center’s white paper concludes that the powers granted to cities cover requiring a minimum wage, though it does limit the ways cities can enforce those rules. Instead of taking an underpaying boss to court like one would in Seattle or San Francisco, the paper declares, a North Carolina city could hit a business with fines, similar to the way it treats a zoning violation.

“A city or county could, therefore, pass a living wage or other ordinance that applies to private employers, if enforcement is through civil penalties rather than litigation.”

One of the main authors of that document was Carol Brooke, an attorney who’s worked extensively on issues of labor law and workers’ rights across the state. She says that the point is for citizens and elected officials to be able to move forward with passing minimum wage rules and other protections for local workers.

“After the general assembly passed HB 74 we were interested in laying out the different options that are still available to cities and counties in North Carolina,” Brooke tells the Blade. “We think it would be possible for a city or county to craft an ordinance where a living wage could be required for contractors or private employers as long as it was enforced through civil penalties rather than a lawsuit by the employee.”

In response to Currin’s memo, Brooke asserts that there was extensive research on the paper’s conclusion that a local wage rule could pass. “We have looked at the case law and we’ve looked at HB74 and the provisions in the North Carolina Constitution and we think there is this window here after looking at all of that.”

Brooke notes that, so far, no city or county has adopted such a rule. Asheville and Durham’s requirements that contractors working with the city pay a living wage — the measure struck down by HB74 — “are about as far as anyone has gone.”

However, Trey Allen, who specializes in public law and government at the UNC School of Government, takes a different view on how such a rule would fare in a legal fight.

“It’s an open question, but I think there’s reason to be skeptical about that authority,” Allen tells the Blade. “There’s no express statutory authority for imposing a local minimum wage, so the argument, I presume, would be that a municipality has the authority to impose such a requirement under its general ordinance-making power.”

That potential authority has never been directly tested in court, and a city passing a minimum wage rule is not directly banned by state law, but Allen says that other court decisions and state laws — including the legislature’s rationale in HB74 — leave him doubting that it would stand.

“That’s a pretty good indication that the general assembly doesn’t view the police power as broad enough to cover a local minimum wage.”

“The courts have been reluctant to approve uses of that authority that have imposed direct costs on businesses,” Allen said, citing the same towing case as the white paper does. “There’s a good argument that if the police powers aren’t broad enough to cap fees in that narrow instance, it’s probably not broad enough to allow you to set a minimum wage for all private employers.”

As to the Justice Center’s conclusion that the details of that case do open a legal way forward for minimum wage rule, “I disagree,” Allen notes.

“But I have to say, the issue’s not come up in court, so I don’t know for sure how it would be resolved,” he continues. “It’s an open question because neither of the state’s appellate courts have ruled.”

The fight last time

Asheville’s not the first North Carolina city where locals have come together to try and pass a local minimum wage. A major effort in Greensboro came together starting in 2006, with thousands of locals signing petition to pass a citywide minimum wage.

“The idea was to get the buying power of the minimum wage just to what it was in 1968,” Fahiym Hanna, one of the organizers of that campaign, tells the Blade. “A lot of people to make ends meet are working two or three minimum wage jobs. If the minimum wage increased, hundreds of people could drop their second or third job and that would be hundreds of jobs that would be available. That was a thing people hadn’t realized.”

The campaign, Hanna recalled, also sought to tie the minimum to inflation so workers wages would keep up with the times more accurately. “It’s always a good idea for people to be paid better.”

Spearheaded by local attorney Jim Boyett and union organizer Marilyn Baird, the minimum wage campaign pushed forward with gathering signatures to put the matter before Council or on the ballot.

In that case, poor wages and widespread poverty drove much of the support, recalls Greensboro Mayor Pro Tem Yvonne Johnson, then the city’s mayor and one of the minimum wage’s backers in local government.

“You look at the poverty rate here, you look at folks struggling, trying to make it” she says, and that reality led her to support the drive. “Anything unexpected that happens it’s a hardship. We have one of the highest poverty rates out there.”

Tensions ran high during the debate over the measure, with the Council’s African-American members supporting the drive and some others opposing it (“I want to squash this with all my might,” Council member Mark Barber declared at a 2007 meeting).

“It was contentious, we had some who were passionately for it and some who were not, they feared that it would affect businesspeople,” Johnson remembers, saying she didn’t find that the opponents concerns borne out by the experiences of other cities that have passed a local minimum wage.

By late 2007, the campaign had gathered 6,412 signatures to put a vote on a citywide $9.36 minimum wage before Council for a vote (and, if the local officials rejected it, before the citizens on the next ballot) but the city clerk ended up claiming that the organizers fell short of the signatures needed to put the matter forward. Campaign organizers shot back that they felt officials were using contradictory petition laws to try and quash the effort.

“The citizens’ initiative, unfortunately, hadn’t been used for anything this big,” Hanna remembers. “There was a lot of confusion about how it could be used.”

At the time, Council voted to approve the petitions, but by early 2008 things had changed, with city legal staff claiming the petition still fell short of the required number of signatures even after organizers gathered additional signers.

Johnson supported the minimum wage effort, as did two of her colleagues. But five of the other Council members voted to rescind the earlier approval, a vote that broken down on racial lines. Some opponents of the minimum wage also cited that the Greensboro Merchants Association had come out against the measure.

However, Johnson notes that while failed to pass Council, the pressure generated by the minimum wage campaign did help raise some city employees up to a more livable wage, an issue that’s come up in Asheville too.

The campaign mounted another push in 2010 (this time for $9.82 an hour), but the city clerk ruled that the petition drive was 1,000 signatures short, and the city attorney issued a statement declaring that Greensboro didn’t have the power to make such a law anyway. Hanna notes that a majority of Council could have still moved a measure forward or put it to a referendum and doesn’t buy the legal rationale for shutting the effort down.

“That’s just not true: the city can decide on a minimum wage,” he says. “They just didn’t think businesses would be very happy with it.”

Hurdles and organizing

During the same time Greensboro’s campaign was starting up, a group in Asheville was considering something very similar. Just Economics is now known for its living wage campaign and helping to organize pushes around improved transit and better conditions for service workers. But back in 2006 the group was researching a minimum wage ordinance for our city.

Eventually, however, its leaders chose to do a different route due to the potential legal hurdles involved.

“We looked into how we could potentially pass a citywide living wage,” Executive Director Vicki Meath recalls. “Through a series of conversations with lawyers and researchers at the N.C . Justice Center we learned about the Blue Cross Blue Shield case which was the case that basically restricts cities and counties from having different wage and hour laws than the state.”

“As far as we know, that is a very complicated and difficult issue” because of that ruling, Meath continues. “It’s not the same as those other cities, legally we don’t have the same options.”

The group works with the N.C. Justice Center on a number of issues, and Meath notes their white paper, but adds that the use of sanctions to back up a local minimum wage “is an untested legal theory and might be very difficult to enforce.”

“We feel like we have more power to influence decision-makers at a local level than at a statewide level, we decided to go the route of initiating the voluntary living wage campaign,” she continues.

Meath encourages locals to get involved in the organization’s living wage campaign or policy advocacy and consider joining statewide and national campaigns for a higher minimum wage.

“Certainly we could push for an increase in the statewide minimum wage and certainly we could support efforts to increase the federal minimum wage.”

She adds that it’s important for Ashevillians to keep talking about how livable the city is and push more businesses to adopt a living wage. “All of those things we’ve seen as effective methods for more employers to do that, but that also needs employers to voluntarily do that.”

Hanna praises the living wage efforts here and notes that from his experience in Greensboro he feels Asheville might be ripe for a minimum wage campaign.

“Asheville’s big on the culture of how businesses do businesses, they like fair trade, they like organic — having employees paid a good wage is one of those things.”

As for Ramsey, he says he still believes the city should press forward and mandate a minimum wage.

“I will grant that it’s untested,” he says. “But the law is not neutral, the law has never been neutral. Many, many things have been demonstrably unjust that have been codified in law. Those things change over time, and they never do so without struggle.”

He doesn’t see the legal hurdles or opposition from the legislature as a reason to back away. “Well yeah, your enemies are going to fight you on things they disagree with you on. That’s no excuse for not weighing in on the side of things you think are legitimate.”

Right now, Ramsey says, he believes that organizing needs to take place to create more ways to press on issues like a local minimum wage. “I feel like building that infrastructure is the stage where we’re at. It’s not a step that can really be skipped.”

Ramsey says he’s also interested to see which Council candidates will support such a move, especially as the issue gains national momentum (the Democratic Presidential candidates have all endorsed a higher minimum wage). “Which ones are actually willing to fight on issues that matter to working people?”

But he has his doubts. “It would be laudable if our elected officials picked this torch up on their own, but I don’t think that will happen. They’ll have to be pressured into doing so, and we should pressure them into doing so.”

If locals want to proceed with a minimum wage campaign here, Meath encourages them to go forward carefully. “We’d love to see our city be able to do what Seattle, San Francisco, Santa Fe and now L.A. are doing and to enact a citywide minimum wage.”

“But in thinking through whether that is a possibility still, given this untested legal theory, I think a good route to go would be folks talking to the N.C. Justice Center and the people that wrote that white paper and really get an idea if that’s a workable strategy.”

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