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Cracking down on employers who ignore wage laws

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The minimum wage was set by the federal government back in 1968 as way to guarantee a floor that the country's most vulnerable workers could earn. It's been updated several times, most recently in 1997, when it was set at $5.15 an hour. Seventeen states have set their own, higher, minimum wage. The latest is Wisconsin, which this week has hiked its minimum wage to $5.70 an hour.

But many businesses consider the setting of a wage floor nothing more than government meddling that increases their costs, particularly for small businesses.

"We see it as the government arbitrarily determining a wage issue, and we believe that is better left to market forces," says Marc Freedman, director of labor-law policy at the US Chamber of Commerce. "What we see is that it's routinely used as an introductory or training wage. People who start don't stay there long. They're quickly promoted."

But advocates for low-income workers, particularly immigrants, say that's not always the case and many families are dependent on minimum-wage jobs for their income. Currently, 30 million Americans are in low-wage jobs that pay less than the poverty rate for a family of four.

"This isn't just about workers and their families. It's about everybody," says Cathy Ruckelshaus, a policy analyst at the National Employment Law Project in New York. "Our economy is never going to get back to where it needs to be until people are paid enough to live on."

Community activists also contend that more employers are actively trying to find ways around paying the minimum wage, by doing things like paying a flat rate or hiring outside contractors.

Mr. Freedman of the Chamber of Commerce counters that he is unaware of an increased number of violations of minimum-wage laws. But he does say that many are looking for creative alternatives.

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