This week a coalition of employer organizations, including Farm Bureau, filed a motion for summary judgment in our lawsuit over the 2011 minimum wage rate.

That rate, set to go into effect on Jan. 1, 2011, will be 12 cents higher than the current rate of $8.55 per hour. Washington already has the highest minimum wage in the country and will continue to have the highest wage if the increase is adopted.

A superior court judge in Kittitas County will hold a hearing later this month in the case, Kittitas County Farm Bureau v. Schurke.

A copy of the motion for summary judgment can be found here: http://www.wsfb.com/system/files/MinWageMotionSummaryJudgment.pdf  

Does Washington law require the minimum wage to be increased when the index it is tied to has not rebounded to its pre-recession levels? Two state agencies disagree on the answer -- Washington’s attorney general says no, but the Washington Department of Labor & Industries says yes. Now Farm Bureau, along with a coalition of trade associations, is seeking a “final answer” in Kittitas County Superior Court.

It’s a legitimate question of interpretation that has significant economic implications, particularly to the thousands of small businesses across the state. And so, it must be addressed by the court.

The legal action filed Nov. 8 challenges the decision of L&I to raise the state’s minimum wage in 2011. The AG’s opinion (AGO) was requested by L&I before a decision was rendered on October 15, 2010. The coalition believes the AGO correctly interprets state law and that it is appropriate for the court to reconcile the issues.

Farm Bureau v. Schurke argues that L&I’s decision to increase the minimum wage is inconsistent with state law because the Consumer Price Index (CPI-W) does not reflect a net increase in the cost of living since 2008. The AGO includes a reasoned legal analysis supporting this position.

The coalition includes Kittitas County Farm Bureau, Washington Farm Bureau, the Washington Restaurant Association, the Washington Retail Association, and the Washington Food Industry Association.

At a time when job creation and retention is critically important for every Washingtonian, Gov. Chris Gregoire and the Department of Labor & Industries today called for an increase in the state minimum wage -- potentially costing the state more jobs. This decision will only further stifle our state's already flailing economy.

Washington state already has the highest minimum wage in the nation. Yet the governor and L&I have chosen to read Initiative 688, which places the state minimum wage on an automatic escalator tied to the urban consumer price index, in such a way that next year's wage will increase 12 cents per hour beginning Jan. 1, 2011. The new wage will be $8.67 per hour.

Recently, the attorney general issued an official opinion (at L&I's request) regarding the correct way to interpret the minimum wage calculation. Using that opinion, the minimum wage should not have risen at all.

Any wage increase further places our businesses at a competitive disadvantage -- meaning fewer jobs here in Washington.

This is another example of L&I engaging in election-year politics that will cost us jobs and harm our economic recovery.

This is why the 2010 elections are vitally important. Whether the issue is minimum wage, workers' comp, water right fees, or tax increases, we must change course!

Elections have consequences, and we need you to vote.

Here are links to the list of Farm Bureau-endorsed candidates and initiatives. We believe these candidates and ballot measures can help lead us out of this fiscal crisis and reignite our economy.

The Department of Labor & Industries is thumbing its nose at Attorney General Rob McKenna and the rest of Washington businesses.

For the second time in the past two weeks, L&I has delayed a crucial decision – this time on the 2011 minimum wage rate. In mid-September the department declined to announce workers’ comp rates for 2011 because I-1082 is on the November ballot.

This latest round of indecision stokes rumors that the agency, which should be making objective decisions, is instead running headlong into the election-year political milieu.

Last week the state attorney general’s office released an official opinion (made, ironically, at the request of L&I) regarding the correct way to calculate the minimum wage rate. The AG’s office interpreted Initiative 688, which places the state minimum wage on an automatic escalator tied to the urban consumer price index, in such a way that next year’s wage would be similar to this year’s. Organized labor, however, is pressuring the governor to follow the lead of Oregon, which saw an automatic increase for 2011.

L&I says it will decide by Oct. 15, after the governor returns from her trade mission and can review both arguments.

This delay only places a crucial decision closer to the fall elections. Washington already has the highest minimum wage in the nation. Any wage increase further places our businesses at a competitive disadvantage – meaning fewer jobs here in Washington.

L&I should be focusing on how best to offer their services to help businesses, not playing politics.

Today L&I Director Judy Schurke announced that the agency would not announce next year’s anticipated workers’ comp rates until after the November election.

L&I is using the excuse that I-1082, if passed, will make changes to the system such that the rates proposed now would have to be changed anyway. This would be like Dr. Arun Raha cancelling an Economic and Forecast Council meeting because the vote on I-1098 may impact future tax revenues.

Unfortunately, L&I doesn’t seem to understand that it is supposed to move forward under today’s laws – not those that may be adopted by the voters in November.

What this announcement really means is that L&I doesn’t want to show how much workers’ comp rates will need to go up next year just to keep the trust funds solvent. Their tactic is to duck and cover and hope I-1082 doesn’t pass.

Here is L&I’s press release, followed by the press release from the Save Our Jobs campaign.

Farm Bureau supports I-1082 because our members simply want to have a choice of where to purchase insurance. The only way to hold the public insurer accountable and have competitive rates is to have private options available, too.

In other news, the Save Our Jobs coalition released a new video in support of I-1082 today. Take a look.

Regulars to Farm Bureau know that we have disagreed with Gov. Chris Gregoire on a host of issues, but I wanted to point out one issue of agreement – immigration reform.

The governor recently took a tour of Eastern Washington and saw first-hand the need for comprehensive immigration reform. I say “comprehensive” because reform must include more than just enforcement, and all steps must be taken simultaneously so that communities and the economy are not destroyed in the process.

The governor, as reported by Seattle PI columnist Joel Connelly, understands the three necessary elements of reform:

• Better control of the U.S.-Mexico border, in both directions. …
• A program of "earned legalization" in which immigrants who want to stay will pay their taxes, pay fines for not being in the U.S. legally and learn the English language.
• An "approved visa program" in which workers come into the United States for a set period to do a job, and return to their home country when it is done.

A large part of agriculture here in Washington depends on migrant, seasonal labor, and farmers desire to have a stable source of legal workers. Yet the politicians and mass media personalities who have attempted to turn the complex issue of immigration reform into a matter of partisan politics do all of us a disservice.

We need to have civil, substantive discussions on the topic. Gov. Gregoire seems to understand this need. The big question is, “When will members of the U.S. Senate understand and take action?”

For more information on what you can do to help pass comprehensive reform, join us at the ImmigrationWorks USA summit in Seattle on August 12. Go here for conference agenda and registration information.

Employers and taxpayers are on the hook for even more unemployment insurance benefits. Yesterday, the U.S. Senate passed a measure that would extend UI benefits yet again, and the U.S. House and White House concurred today.

Normally, a laid off worker is eligible for benefits for six months. But for the past two years Congress has extended that time period to 99 weeks -- nearly two years of payments. Today’s action by Congress will extend those benefits further -- at a time when government unemployment trust fund balances are falling.

The funding source for the extension: more deficit spending -- with employers potentially on the hook for years to come.

And then there is the pile-on effect.

• Employers may pay as much as 40 percent more in UI taxes next year, depending on their experience rating and social costs.
• The average wage for calculating UI benefits and premiums is going up, which will add costs to employers as well.
• Finally, the Bush tax package is set to expire at the end of the year. This means higher estate, capital gains, and personal taxes will be in force next year -- to say nothing about the tsunami of Obamacare taxes and fees coming in the next few years. These tax increases will have a significant impact on employers.

Depending on the economy, it may be another year or so before UI tax rates level off and begin to decline.

Meanwhile, employers must know how to deal with the UI system. We are offering a two-part series of webinars to explain the importance of responding to ESD forms.

July 29, 11:00 a.m. Unemployment Insurance: Understanding the Claimant Separation Statement (Part One)

August 5, 11:00 a.m. Unemployment Insurance: Understanding the Notice to Base Year Employer (Part Two)

Register here.

Take a look at the first video in support of ending our state’s monopoly on workers’ comp insurance. The moral of the story: Competition is good, and we desperately need more of it. The current failures in the workers’ comp system are stifling job creation.

For more info on why I-1082 matters, visit www.saveourjobswa.com.

Most importantly, contribute to the Yes on I-1082 campaign.

The blog below was submitted by an active Farm Bureau leader in Snohomish County. If you would like to contribute to this blog, please contact Mollie Hammar with your submission so we can help make your voice heard.

More Bad News on the Employment Front

By Bob Clark

Unemployment continues to be a major headache in Washington state and the nation. The latest numbers, released today, were grim to say the least.

On the national level the advance number of actual initial jobless claims under state programs, unadjusted, totaled 513,347 in the week ending July 10 -- an increase of 44,855 from the previous week. There were 671,242 initial claims in the comparable week in 2009.

Here in Washington state there was some improvement in the unemployment situation in Pierce and Spokane Counties, but King and Snohomish Counties posted an increase of some 5,000 new jobless claims in the month of June. That, coupled with a major decline in retail sales for June in Washington, may have an impact on local produce and ag sales this summer.

For those of you not familiar with these labor statistics, there are basically two numbers that matter. They are the U3 number (the percentage of the work force collecting unemployment benefits) and the U6 number (the total number of unemployed people). Statewide the U3 number stands at 308,180 as of the end of June. The U6 number, now at 17.1 percent, came in at 605,733 in the Evergreen State.

Media types typically have these statistics wrong and mistakenly refer to the U3 number as the “unemployment rate”. The other numbers that are routinely touted are the “seasonally adjusted” numbers, which are simply statistics manipulated in an attempt to show trends.

The July stats that will be out in August will tell us if Washington state is slipping into a “double dip” recession. Follow these links to see the actual numbers from the U.S. Department of Labor and the Washington State Employment Security Department.
 

About the author

 Bob Clark and his wife Kay operate Circle KB Ranch in Monroe, WA, where they have bred rare, purebred Irish Dexter cattle for the last five years. Bob serves on the Snohomish County Farm Bureau Board as membership chair. He is also commander of Post 58 American Legion and President of the Snohomish Chapter of the Citizens’ Alliance for Property Rights. Bob has been following, researching, and writing about economic conditions in Washington state for many years.

Do you want to see what’s wrong with our current workers’ comp system? Check out this video from KING 5, which aired a story yesterday on workers’ comp problems.

KING 5 investigators found some of the same problems we have seen before: “… The number of accidents and fatalities on the job is dropping, yet more and more cases are taking longer and longer to resolve.” This means workplaces are becoming safer, yet small business owners are being are forced to pay higher premiums.

L&I says there isn’t a single, known reason for this phenomenon. Regardless of whether there are several reasons or only one, Initiative 1082 is the one answer this year that may help unravel that mystery.

Forcing L&I to compete alongside private insurers for the business of small employers will help incentivize the system to provide the correct benefits to truly injured workers at the correct rate of premium for employers.

What we know for sure is that our current system is ailing and in need of a remedy. I-1082 fills that prescription.