Bloomberg Businessweek - July 20-26, 2015

Page 29

Digits the minimum wage is $7.50 an hour, the tip credit is 50 percent. If an employee’s tips are too stingy to make up the tip credit, employers are supposed to pay the difference to get their total pay up to the regular minimum wage. A 2014 White House study found that workers who are owed a top-off under tip credit rules often don’t get the money from their employers. Not all states have tip credits: Seven, including California, require tipped workers to be paid at least the going minimum wage. Portland council members say they wanted to leave the base wage for tipped workers at $3.75, but increase the top-off requirement so they’d be guaranteed at least the new $10.10 hourly minimum. “To tell you the truth, when I read it, it wasn’t plain to me how it accomplished what we were looking for,” says Councilman Jon Hinck, a lawyer. “It didn’t turn out quite as I anticipated.” The error was immediately flagged by the restaurant lobby, whose members say they tried to warn Portland’s council members before the vote that the ordinance didn’t say what they apparently thought it did. “It’s very confusing,” says Greg Dugal, chief executive officer of the Maine Restaurant Association. “For somebody that doesn’t even know that a tipped person makes less of a wage than a regular employee, they’re confused right out of the gate, because that doesn’t make any sense to them.” Labor organizers are delighted. “I think Mayor Brennan and the council should be proud of the mistake that they made,” says Kennard Ray, the national policy director for Restaurant Opportunities Centers United, which argues tip credits leave workers more vulnerable to sexual harassment. Groups like his are mobilizing Portland servers to lobby their council members—all of whom are either Democrats, independents, or members of the Maine Green Independent Party— not to repeal their accidental raise. Members of the council say they intend to put things right. “Everyone makes mistakes, and I think you just deal with those and go back and correct them,” says Councilman Justin Costa. “Even if that is not the norm at other levels of government right now.” On June 23 state legislators in Maine voted unanimously to fix a 2013 bill that, because of a drafting error that left out an “and,” deprived an energy efficiency program of $38 million.

8.8m

Total number of callers the IRS’s toll-free hotlines hung up on this tax season because of staff cuts, up from 544,000 in 2014. The practice is referred to by the agency as a “courtesy disconnect.”

Republican Governor Paul LePage, who’s been at odds with Maine’s Democratic House and Republican Senate, had unsuccessfully tried to use his veto to block the fix. He now has his own legislative accident: Maine’s attorney general, a Democrat, announced on July 10 that 19 bills would become law because LePage blew a 10-day deadline to veto them. LePage, who says he was within the allotted signing window, has threatened to sue the legislature over the issue. He’s since left another 51 bills unsigned that Democrats say are now law. A vote on a minimum wage fix in Portland could come as soon as July 20. “There doesn’t seem to be much disagreement on the intent, and we’re not locked in the outcome,” Hinck says. “I think we will be able to fix it without much trouble.” —Josh Eidelson The bottom line Portland’s City Council passed a minimum wage hike that accidentally gave tipped workers a 69 percent raise.

Security

Texas Calls in Bugs To Solve a Border Crisis Nothing else will stop the spread of carrizo cane along the Rio Grande “The plant has met its worst enemy” in the Arundo wasp

It’s been burned, bulldozed, hacked, and poisoned. Now the state of Texas wants to try wasps to get rid of carrizo cane, a giant reed that chokes the banks of the Rio Grande and creates natural cover for traffickers operating along the U.S.-Mexico border. Stands

of dense cane have camouflaged migrants, drug stashes, and, in one instance, a Bengal tiger cub abandoned by smugglers. “I’ve heard agents talk about it like it was Sherwood Forest,” says Francis Reilly, an environmental consultant who advises U.S. Customs and Border Protection, which favors eradicating the plant. “They’d hear screams or gunfire in the cane thickets and not be able to find anybody when they went in.” Texas Governor Greg Abbott signed legislation in May authorizing the state’s Soil and Water Conservation Board to spend $10 million to eradicate the cane. That would pay for John Goolsby, a U.S. Department of Agriculture entomologist, to release an armada of cane-eating Arundo wasps from France, where the plant grows near the Mediterranean coast. Carrizo cane sucks up enormous quantities of water, a problem in the parched Rio Grande Valley. (Spanish speakers call carrizo el ladrón de agua, or the water thief.) But it didn’t attract much attention until border authorities began cracking down on illegal immigration a decade ago. In 2008 the U.S. Department of Homeland Security announced a plan to annihilate carrizo cane with imazapyr, a powerful herbicide. The proposal sparked opposition from environmental activists in Laredo, Texas, who sued. Protesters, including priests and first-graders, descended on City Hall for a public hearing. The spraying scheme died without ever being put into action. Since then, the feds have used bulldozers to tear up the reed by its roots, but that hurt the riverbank ecosystem, home to ocelots and rare jaguarundi, a type of wildcat. Agents set stands of the plant on fire, but the reed grew

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Articles inside

What I Wear to Work: NBBJ’s Sarah Morse favors pants a little short, skirts a little full, sleeves a little long

1min
page 69

The Critic: Lil Wayne’s self-released new album is a ringing F-You to his label. Too bad it’s no good

3min
page 68

Travel: Get back to the land in Morocco, Hawaii, or other great farmstay vacation sites

4min
pages 66-67

Drinks: The fern bar, with its sweet ’70s drinks, is the new speakeasy in several U.S. cities

2min
page 64

Charter schools earn an A in muni bond sales

4min
page 40

Everybody wants searchable apps, except app makers

3min
page 34

Survey: Tips on mentoring, from executives who ought to know

1min
page 65

Clarifying CEO pay makes things murkier

4min
page 39

Innovation: Carpeting the ocean floor to harness wave power

5min
pages 35-37

Biofuel developer Euglena has seen the future, and it’s pond scum

5min
page 33

A high-level Republican kaffeeklatsch ponders ways to get out the vote

3min
page 30

In Portland, Maine, a master class in how not to raise wages

4min
page 28

Currencies: While the euro zone squabbled, the pound looked awfully good

4min
pages 21-22

What’s a nice hotel doing in the middle of a Saudi prison?

3min
page 20

With Ferrari on the exit ramp, Fiat Chrysler buffs up Maserati

4min
page 23

What Texas really needs, the USDA figures, is more wasps

4min
page 29

Briefs: A same-sex suit at Wal-Mart; Honda vs. the feds

6min
pages 25-27

In a Brazil shantytown named for Dilma Rousseff, they’re over her

2min
page 19

Boutique owner Pavlina Papailiopoulou followed her dream—to Greece

4min
page 24
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