Living Wage Laws Difficult To Enforce

For the cities that endorse the Living Wage Law, ensuring compliance is difficult.

For the cities that endorse the Living Wage Law, ensuring compliance is difficult.

A number of cities have bowed to pressure from labor advocates and enacted “living wage” laws, some of them phasing in plans that will top out at $15 per hour.

A living wage is the minimum income necessary for a worker to meet their basic needs. It was designed to fight poverty, but the ripple effects that come after cities actually adopt the Living Wage Laws are numerous.

Ensuring that employers actually follow the new guidelines is difficult. State and federal laws don’t require employers to provide data proving that they are in compliance, oversight agencies say. The data is most often contained in payment check stubs, but employers are not required to share the information.

Cities That Use Living Wage Laws

Among cities that have adopted the wage increases are Santa Fe and Albuquerque, New Mexico, San Francisco, California, and Washington D.C. The issue is on the agendas of many state legislatures and city governments as the press for better wages heats up.


Enforcers generally rely on worker complaints to initiate actions against employers who do not conform, but the employees are reluctant to complain for fear of reprisals, so many instances of non-compliance go unnoticed. Labor groups estimate that a quarter of the country’s workers who fall under the guidelines are not receiving the legislated wages. But if one employee complains, enforcers use it as leverage to investigate pay records for all of the business’ employees on the supposition that the problem affects more than the single complainant.

Recommendations For Enforcement

Haeyoung Yoon of the National Employment Law Project calls the problem “pervasive and rampant” in an Associated Press news article. The project recommends higher fines against non-compliant employers and more stringent enforcement. The costs of enforcement are high, but could be recouped through fines, she said.

Some employers don’t understand the new laws, but others sidestep the provisions by requiring workers to work unpaid or off the clock to make up the difference. Others raise the wage, but cut the benefits.

Law Suits

Hospitality and transportation workers serving in SeaTac, Washington are granted the Living Wage Law. This community however needed courts to enforce compliance and have filed more than a dozen class-action suits this year in behalf of workers. The total amount of contested wages, related benefits and possible penalties could add up to $62.5 million.

Political Campaigns Spawn Economic Fallout

Political uncertainty causing economic angst.

Political uncertainty causing stagnant economy.

The rancorous 2016 election campaigns are having a negative effect on the country’s economy, the experts are concluding.


Manufacturing has taken a dip, with the smallest improvement in sales since 2009 and the companies are blaming the political uncertainties for the difficulties. The Markit Economics manufacturing index fell to 50.8 in April, the lowest it has been since September 2009.

American Households

American households also seem to be retrenching as consumer confidence slides to the lowest level since last September. The unusual and more confrontational nature of the debates, rampant dissatisfaction with the major parties and the uncertainty of where the country would head under pending leadership all are factors.

Business Spending And Investing

Some businesses are delaying spending and investment decisions until there is more clarity about what might be on the minds of the various candidates vis a vis business regulation. Policies that might make a difference in bottom lines are still pending.

Presidential Nominees Positions

Donald trump, likely Republican presidential nominee, has thrown out such possibilities as putting big tariffs on Chinese imports, while Democratic front runner Hillary Clinton has waffled on some of the positions she has championed in the past that were pro-business.

Other Indicators

This sort of flux in political positions has caused a lull of sorts in business activity, economic experts say. Among other indicators, orders for business equipment were down by almost 3 percent in February. The Federal Reserve also has noted signs of increasing unease about the political situation as it makes surveys for the Beige Book. Eight mentions of the campaign were made in the three reports that have been published by the central bank so far this year. In 2012, the last general election year, there were two such mentions. In 2008, there were none.

consumer Angst

The University of Michigan’s monthly confidence survey also indicates more consumer angst about the direction of the country’s politics. The economy may be stagnant as it waits the outcome of the November balloting.

Angry Patron? Cultivate An Ally

How to diffuse an angry patron.

How to diffuse an angry patron.

When you are faced with a screaming customer who is not satisfied with the service you have provided, don’t respond in kind, but use the opportunity to improve.

Marc Cosentino, co-owner of Goodfella’s Brick Oven Pizza in Staten Island, N.Y., found himself in that position, dealing with a husband who was very unhappy that Cosentino had hung up on his wife, who was treating the businessman to a tirade because she was not satisfied with his service.

Costenino did the right thing. Instead of escalating the situation with tit-for-tat jabs, he acknowledged that he had been wrong in the first instance. Then they had a level playing field to carry on a rational conversation and come to an agreement. The customer was mollified and ready to patronize the pizza parlor once again.

Joe McCullum, owner of Eagles’ Wings Business Coaching in Hamden, Conn., advises that an in-your-face irate customer really represents an opportunity to win a loyal fan for your business. He gives these tips for defusing a confrontation and turning it around:

Stay Calm

When confronting a situation, stay calm. Make eye contact with the grieved customer and ask what the problem is. You might want to take notes, a signal that you are really interested in knowing the details. Don’t rush things. This may be all it takes to set the scene for rational discussion. Most people aren’t used to having their consternation acknowledged. Don’t head for a back room to address the confrontation. That lets him or her know you are willing to face the complaint and try to work it out. Other customers may actually be impressed. The reputation will last longer than the incident.

Don’t Become Defensive

That will only escalate the irate customer’s frustration. If there is a misunderstanding, wait for a calmer moment to present your viewpoint. Acknowledging that you might be angry if you had found yourself in a similar situation may help.


Apologize for the event and express thanks to the individual for bringing unsatisfactory service to your attention. Ask how it can be corrected and make a sincere effort to work out a solution together. Get the person’s contact information and do a follow-up to ensure that the problem was satisfactorily resolved.

Making the effort could ensure a loyal customer who is more than ever ready to bring you his business.

Are Extended Warranties Worth The Cost?

extended-warrantiesCall them extended warranties or call them service contracts. The question is: Are they worth what you pay for them? Such an arrangement provides for service and repairs beyond what is agreed to in the purchase price.

Obviously, it’s a gamble, the odds being whether the item you are considering will have problems before the contract ends so you can collect. You pay based on your expectations. The fact that manufacturers continue to offer extended warranties on their products is a clue. They aren’t losing money on the deal or they wouldn’t be doing it. Before you invest in an extended warranty, consider these facts:

The usual terms of an extended warranty offer service on the item for an additional three to four years, although they vary based on the expected life of the product. In practice, they make money for the seller, in some instances with a profit margin in excess of 200 percent. The agreement is not between you and the manufacturer, but between you and the seller.

Many extended warranties are never used. A poll taken several years ago by Angie’s List found that 61 percent of the respondents who had purchased such a warranty never used it. Actually, the chances of a product breaking during the period covered by the warranty is very small.

For instance, if you pay $200 for an extended warranty on your clothes dryer and have a repair that costs $150, the purveyor of the warranty is ahead of the game.

You might be better served to look for a product with a better initial warranty. Look into the expected life of the product. Almost everything has a range of longevity that a consumer can safely rely on. Not all brands of the same product have the same life expectancy, so you are wise to be specific. Examine consumer reports to determine which have proved to be the most trustworthy. The cost counts, too. An extended warranty with a $200 price tag obviously doesn’t make sense for a $99 camera.

Be sure that you fully understand the specifics of the extended warranty. On automobiles, for instance, it may exclude certain parts or repairs.

If you create an emergency funds category in your budget, you will have the money for repairs or replacement if needed. That takes the gamble out of it.

The four major credit cards, Visa, MasterCard, Discover and American Express, all offer extended warranties for products you purchase with their cards. In some instances, you can add another year at no cost.

Check with your state to see if it has “applied warrant of merchantability” provisions. The laws differ from one state to another, but they establish guidelines based on the assumption that a seller owes warrantability to the buyer. The expectation is that if you use the product in a reasonable and prudent manner, it should perform as the seller presented. You should be able to return a product that doesn’t live up to expectations to the dealer for a refund or replacement. If the gentle approach doesn’t work, you may have to enlist a lawyer, but weigh the expense of legal advice against the cost of the product.

Consider the cost of your product up front. A car is a very serious investment that may justify the price of an extended warranty. An inexpensive item such as camera or phone might go into the “disposable” column.

An extended warranty may be what you need in some instances. Just be certain that you have considered all the variables.

    CEO Pay Ratio Requirement By The SEC

    sec-rulingsIt’s no secret that the top bosses in any company make more money than the workers down in the ranks. It’s expected. But the U.S. Securities and Exchange Commission is asking the question: Just how large should the gap be?

    The SEC commission recently voted to require public companies to disclose the differential between their chief executives’ pay and their median employee pay. The topic has been a hotly debated issue before the SEC for years, based on public concern. More than 280,000 comments have been forwarded to the agency over the past two years. The final SEC vote was 3-2, with two Republicans on the bi-partisan board voting no. Predictably, big companies have resisted the effort.

    A 2010 law opened the way to the SEC demand for disclosure. The Great Recession was impetus for the law. Objections to over-sized pay packages for some CEOs fueled the movement. Such pay inequities encouraged disastrous risk-taking opponents argued, leading to short-term gain at the expense of long-term performance.

    No one expects that disclosing the gap will lead to wholesale trimming of executive pay or significant rises in employee salaries, but the effect could be symbolic, watchdog groups say.

    More shareholder participation in voting on executive pay packages may result. Companies will be required to report the pay ratio in annual financial reports starting with Jan. 1, 2017.

    The SEC bowed to company pressures by building some leeway into the requirement. Companies will be allowed to use estimates or sampling to determine median employee pay. Up to 5 percent of offshore employees can be excluded from the median pay calculations.

    Smaller companies with less than $75 million in total shares held externally, or under $50 million in annual revenue are exempted from the new rules. Emerging growth companies and investment companies also are excused from the requirements.

    SEC Chair Mary Jo White called the measures “good and reasonable,” but business groups argue that the requirements will be costly and time-consuming. The U.S. Chamber of Commerce predicts that the cost to companies likely will top $700 million, many times the SEC estimate of about $73 million.

    There is little chance that workers on the low end of the totem pole will end up much better off because of the SEC regulations, but increased awareness of the scope of the gap between high and low salaries could have some effect over the years, proponents predict.