Business Lobby Fuels Alabama’s Minimum Wage Fight

Business Lobby Fuels Alabama’s Minimum Wage Fight

(Photo: AP/Brynn Anderson)

Well-funded business groups in Alabama are spending millions to help kill a minimum wage hike enacted by the city of Birmingham, prompting outrage from labor organizers who plan a massive rally in the state capitol of Montgomery on Tuesday.

The city-state clash over the minimum wage in Alabama mirrors similar fights around the country that pit cities that have passed pro-worker policies like minimum wage hikes, paid sick leave, and wage theft protections against GOP-controlled state legislatures now pushing so-called “preemption” laws to ban localities from passing certain statutes.

In Alabama, the the city of Birmingham raised its minimum wage to $10.10 an hour in August, up from $7.25. The Republican-controlled House responded with a bill that bans Alabama cities from passing minimum wage laws. Tensions are now running high in Montgomery, as a coalition of fast-food workers and clergy members geared up for a Tuesday rally, and the Birmingham City Council scrambled to fast-track implementation of its minimum wage increase before the legislature enacts its preemption bill.

"We have legislators down in Montgomery who are taking a stance reminiscent of George Wallace standing in the schoolhouse door against equal access to education," Birmingham City Council President Johnathan Austin told

The minimum wage battle has drawn big money in Alabama, which imposes no limits on campaign contributions. The Business Council of Alabama alone gave nearly $1.5 million to Republicans in statehouse races, helping to expand the GOP’s already-strong majority. The group gave $115,000 to the 2014 reelection effort of Republican House Speaker Mike Hubbard, who sets the lower chamber’s political agenda. Hubbard is currently battling 23 felony ethics counts of using his office for personal gain.

The state’s Business Council has made preemption a centerpiece of its 2016 legislative agenda, explicitly stating its support for “legislation that would prevent local governments from setting wage, leave, or other labor policies for private employers at levels higher than those already required by the state and federal governments” and for “fighting efforts to create a state minimum wage above the national minimum wage.” The business group also has an army of at least 11 registered lobbyists pushing its agenda on a day-to-day basis.

In addition to the BCA, an interconnected web of four business PACs—LEG PAC, NEW PAC, MAX PAC, and FAX PAC—spent almost $500,000 in 2014 to “promote candidates who share a common philosophy for pro-industry, pro-development business and education environment in Alabama,” according to state PAC filings. Those PACs also gave six-figure contributions to Hubbard’s campaign coffers.

The well-funded business groups have set out to stop pro-worker policies from spreading to other cities like Tuscaloosa, Mobile, and beyond, pressing state legislators to pass preemption laws that would thwart what the business leaders see see as burdensome local laws.

“The pattern is that opponents of economic populist measures will always go to the state to strip cities of the power to act,” said Paul Sonn, general counsel for the National Employment Law Project, in an interview earlier this year. “You see this most frequently in the South. Typically there’s the veneer of keeping the state regulatory framework uniform. That’s pretty clearly not what’s driving this. It’s naked power politics.”

The business lobby has a lot of friends in the Republican-dominated Capitol. In the 2014 election cycle, business associations contributed almost $2.9 million to local Senate and House races—almost entirely backing GOP candidates—a Prospect analysis of National Institute on Money in State Politics data found.

The push for a local-minimum wage ban is not the first attack on pro-worker policy in Alabama. A few years back, the state legislature passed a preemption law that banned cities from passing laws mandating paid sick leave. The state House also recently passed a bill that would enshrine the Alabama’s right-to-work law, which bars union membership, fees, and dues as a condition of employment, in its constitution.

While Alabama business associations have spent heavily on local elections, they have plenty of company around the country. In the 2014 elections, business associations contributed a combined $12.7 million to state legislative campaigns—including heavy investments in Southern states where pro-business policy glides most easily through legislatures. Business spending has also been heavy in former industrial Midwest states like Illinois, Indiana, Michigan, and Missouri, where conservative groups have invested in shifting state control from blue to red.

Expect those numbers to grow exorbitantly in the 2016 election cycle as more blue cities continue passing progressive policies, despite operating in often-hostile red states.