September 12, 2014

Tribes Pushing Minimum Wage Higher

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Samantha Lowe of Tahlequah works the front desk of Cherokee Nation’s Career Services office. She received a full-time position after two years of participating in the tribe’s Summer Youth Employment Program making minimum wage.

Photo supplied by Cherokee Nation

Samantha Lowe of Tahlequah works the front desk of Cherokee Nation’s Career Services office. She received a full-time position after two years of participating in the tribe’s Summer Youth Employment Program making minimum wage.

Though the minimum wage remains at $7.25 per hour for most Oklahomans, several tribal nations pay more or have boosted their entry-level wage above the federal level, a move that could cause the Oklahoma Legislature to take another look at the issue.

The wage boosts have occurred over the past few years, even as state lawmakers were working on legislation to prevent minimum wage increases.

This spring, the legislature passed Senate Bill 1023, by state Sen. Dan Newberry, R-Tulsa. The bill prevents any city or town from establishing a minimum wage. Gov. Mary Fallin signed SB 1023 on April 14.

Even so, several Oklahoma Indian tribes – exempt from the state law because of their sovereign nature – have raised their minimum pay.

An analysis by Oklahoma Watch shows that at least five of Oklahoma’s 39 federally recognized tribes -- including the state's largest tribe, the Cherokee Nation--have minimum wage levels that go far above the federal standard of $7.25 per hour.

In February, the Cherokee Nation announced it was increasing its minimum wage to $9.50 per hour. Principal Chief Bill John Baker said the increase would apply to all 8,000 of the nation’s employees. Previously the tribe’s minimum wage was $9 per hour.

In a media statement, Baker said the increase would “help more Oklahomans put food on the table.

“It will also allow our employees more discretionary spending, which boosts the local economy,” he said.

Located in the northeastern part of the state, the Cherokee Nation is the state’s largest Native American tribe with more than 250,000 members.

In southeastern Oklahoma, the Chickasaw Nation, which generated more than $1 billion in revenue for the first eight months of its 2014 fiscal year, pays its employees about $1.75 above the federal minimum wage level.

"The Chickasaw Nation observes and exceeds federal minimum wage guidelines," said the tribe's spokesman, Tony Choate. Choate said very few of the tribe's 10,000 employees are paid at the tribe's minimum wage level.

"Only a small percentage of our employees make less than $9.50 per hour," he said.

In addition to the Chickasaws, the Osage Nation increased its minimum pay to $11.50 per hour in 2013, among the highest minimum wages paid in Oklahoma. Prior to the increase, the Osage tribe’s minimum wage was $7.31 per hour.

Headquartered in Concho, the Cheyenne Arapaho Tribe set its minimum wage at $9 per hour this year, $1.75 more than the federal standard.

In the Tulsa area, the Muscogee (Creek) Nation increased its minimum wage to $10.15 per hour in 2010. Muscogee (Creek) officials said the increase was phased in over several years, moving entry-level pay from $8.50 to $10.15 per hour.

At the time of the increase, then-chief A.D. Ellis said it was his dream to see tribal employees get off the federal Commodity Supplemental Food Program.

Oklahoma's tribal nations, one study indicates, have become a major part of the state's economic engine.

According to 2012 economic impact analysis by the Steven C. Agee Economic Research and Policy Institute at Oklahoma City University, the state's 39 tribes support about 87,174 jobs in Oklahoma, as well as $2.5 billion in state income, when "multiplier" impacts are taken into account.

In addition, the study said Oklahoma's tribal nations generate $6.7 billion in direct contributions from tribal businesses and government spending, and tribes account for $4.1 billion in spillover production of non-tribal firms that support their operations.

"In fact, the total direct and indirect economic impact represents 7 percent of the state’s $148 billion total economic output in 2010," the study said.

The actions by some tribes to increase their minimum wage add another layer to the debate about the issue in Oklahoma and many parts of the nation. Workers at fast food restaurants in New York, Detroit and other cities have staged protests, seeking to increase the minimum wage to $15 per hour.

In February, the Congressional Budget Office said increasing the minimum wage from $7.25 to $10.10 would boost earnings for 33 million Americans by $31 billion. The increase would help bring about 900,000 people out of poverty, the CBO said.

In Oklahoma, at least one state lawmaker said he would file legislation next year to increase the minimum wage for restaurant workers. State Rep. Mike Shelton, D-Oklahoma City, said federal law allows restaurants to pay servers a subminimum wage of $2.13 plus tips. Shelton said any employer whose workers receive tips is required to pay a minimum wage of $2.13 per hour, provided that amount plus the tips equals the federal minimum wage of $7.25 per hour. But trying to live off that type of pay, Shelton said, was difficult.

“It's insane. People can’t get by on that,” he said. “Even when you figure in the tips.”

Shelton confirmed he was developing legislation to increase the $2.13 figure to $4.25 per hour over a three-year period: 62 cents per hour the first year, then 75 cents each of the next two years. He said his legislation would affect about 30,000 restaurant workers in Oklahoma.

“We’re not just talking about someone working part time,” he said. “In my district you have teachers moonlighting at restaurants just to make ends meet. You have seniors who are going back to work to cover gaps in their retirement. It’s a big problem.”

A study by the Oklahoma Employment Security Commission shows that 165,000 Oklahomans work in the food service industry, with 30,080 employed as waiters and waitress. According to the OESC study, waiters and waitresses have a mean average annual salary of $18,630.

M. Scott Carter can be reached at scarter@oklahomawatch.org