Help to grow Cleveland’s middle class. Make it possible for the city to crackdown on employers that cheat workers out of their pay. Prove to residents that the city really’s got their backs.
These are some of the goals of a set of new and strengthened existing laws that City Council has passed and the Bibb administration has backed in the last few years, supporters say.
One ordinance deals with wage theft, or when employers cheat workers out of their pay. Another focuses on pay transparency, including banning employers from asking job seekers their salary history and requiring businesses to post pay ranges on job listings. Most of the ordinances apply to any Cleveland employer, city contractor or company with operations within city limits.
I’m watching downtown continue to flourish, but I want to make sure these neighborhoods flourish as well.”
Bishop Eugene Ward Jr., a member of Cleveland’s Fair Employment Wage Board, on the importance of increasing enforcement of worker-friendly laws.
Council has also dramatically increased the fair employment wage, the minimum city contractors are allowed to pay workers, which is currently $15.85 per hour. Annual increases are tied to inflation (Ohio’s minimum wage is currently $10.70 per hour.)
Officials believe the laws collectively have the potential to improve the economic lives of residents in Cleveland, which has consistently ranked among the poorest big cities in the United States. After an August news conference announcing that the city was stepping up enforcement of these worker protection ordinances, Mayor Justin Bibb and Council President Blaine Griffin told Signal Cleveland that they believed these laws could help expand Cleveland’s middle class.
Members of the Fair Employment Wage Board, which will oversee enforcement of these laws, also see them as having the power to improve the lives of Clevelanders. Like the mayor and the council president, they say the types of economic exploitation the laws address have played a role in stagnating the living standards of many residents. But can this initiative that supporters say has so much promise be fulfilled?
Bishop Eugene Ward Jr., pastor of Greater Love Baptist Church on East 116th Street and a member of the fair wage board, believes that it can. He is outraged by any employer that cheats workers out of their pay, especially those with city contracts. Now, if caught, they can face fines and be barred from city contracts.
“I am so tired of business owners and contractors coming into the city making millions, but their employees are living at poverty wages,” he said. “It is disrespectful to residents, and it keeps our city in a blighted situation.
“Now that we have given attention to this issue, we need to continue to press the issue,” he said. “We need to make sure there is enforcement that has some teeth by taking businesses to court and even making sure they go to jail.”
Worker laws
Cleveland to step up enforcement of wage laws aimed at helping workers
America’s middle class is declining
Cleveland’s desire to improve the economic well-being of its residents is part of a larger concern about America’s dwindling middle class. In 1971, 61% of Americans lived in middle-class households, according to an analysis of government data last year by the Pew Research Center. More than five decades later, the percentage had dropped to 51%.
Ward has seen how the decline of manufacturing and other jobs that offered generations of Clevelanders entry to the middle class has affected many residents. Many of them, including in his congregation, are now struggling. They speak with him about how their low-wage jobs aren’t enough to support families and how they’ve been exploited by employers, such as being forced to work off the books.
He said stepping up enforcement of worker-focused laws will help those residents. A few years ago, council members also passed a payroll fraud law aimed at employers that manipulate their payrolls, including to avoid paying Social Security taxes for employees and other taxes they are required to pay based on workers’ earnings.
“I’m watching downtown continue to flourish, but I want to make sure these neighborhoods flourish as well,” Ward said.
Can stepped up enforcement of worker-focused laws help lift the living standards of residents, especially those living neighborhoods where many are barely holding on economically? Wage theft and being paid less than the fair employment wage disproportionately affect lower-income workers.
Eric Chaffee, a business law expert and professor at Case Western Reserve University School of Law School, said such laws, if enforced, have the power “to lift people up who may not have a lot of economic power and may not have the ability to garner a lot of other people’s attention” to their plight.
“Not only are the bad actors going to be punished, but other employers who might be considering these types of things or flirting with them, or doing things where they might end up being negligent or guilty of them, are going to reconsider doing them.”
Nonprofits will lead education campaign raising awareness about Cleveland’s worker-focused laws
The Fair Employment Wage Board prefers that businesses comply with these laws rather than having the city take legal action against employers, said Matt Ashton, owner of Lekko Coffee on Detroit Avenue and board chair. This is why the board is launching education efforts aimed at making sure that employers as well as workers know about the laws. The nonprofit Northeast Ohio Worker Center, which lobbied for the laws, will do outreach to workers. The nonprofit Collaborate Cleveland, which advocates for policies that help women and lobbied for the pay transparency legislation, will do outreach to businesses.
The worker center’s strategy includes “going to where residents are and talking to them about their work lives and how these laws can help them,” said Grace Heffernan, the organization’s executive director. The center will also partner with workforce development, training and related programs to inform their participants about the laws.
Collaborate Cleveland will work with a number of business groups to get the word out to employers, said Abby Westbrook, the organization’s executive director. They include the Greater Cleveland Partnership, the Northeast Ohio Hispanic Chamber of Commerce, The Presidents’ Council, which focuses on Black business growth, Plexus LGBT and Allied Chamber of Commerce and the Society for Human Resource Management.
Plexus welcomes working on outreach, especially to small businesses, said Amanda Cole, the executive director. She said these employers need to know the details of compliance because “getting hit with a fine or getting bogged down in city bureaucracy if you aren’t following the rules correctly can really hamper a business from doing well.”
Employers also need to know how the laws, including pay transparency, which Plexus supported, can be good for business, Cole said.
“It does provide workers more rights in negotiation, but I don’t think that that has to hinder or hurt business,” she said.
Pay transparency can also streamline hiring, Cole said. “They’re not going to waste their time interviewing candidates who walk out of the room when they find out that your starting salary is far below what they can do. They’re going to be able to have the right fit candidate with background, expertise, years of experience, etc. apply.”
The Presidents’ Council believes that outreach is important so that employers, especially small businesses, who want to follow the worker-focused laws will know how to, said Danielle Sydnor, the organization’s president.
“Transparency is important,” she said. “We need to have a thriving workforce to actually have a thriving business sector. We don’t think that the two are in competition with each other, and the two actually should share the same goals. We hope that it [stepped up enforcement] would root out any people who are trying to harm members of the community.”
Stepped up enforcement often includes imposing penalties. Prior to the new and strengthened existing laws, a business theoretically could have kept receiving a city contract even after engaging in wage theft or paying below the fair employment wage. Wage theft can range from paying workers less than minimum wage to requiring them to do work before their shift starts, such as putting on protective gear, before clocking in.
Collaborate Cleveland sees the pay transparency ordinance, which takes effect Oct. 27, as a good way to help close the gender wage gap. Women make 83 cents for every dollar men make, according to an analysis of Census data by the American Association of University Women. Latinas make 58 cents on the dollar, Black women 66 and Asian women 94 cents. Research, including that by the National Bureau of Economic Research and the National Women’s Law Center says that pay transparency policies and laws can help in closing the gap.
In addition to the official education efforts, board member Ward says to count on a lot of grassroots activity. He intends to discuss the worker-friendly laws from the pulpit, encourage other pastors to do so and enlist ministerial groups to spread the word.
Heffernan welcomes it.
“It’s going to take all of us to really make these policies come to life,” she said.
Cleveland’s worker-focused laws already having an impact
Even without the stepped up enforcement, the revamped laws have helped workers. The board, which had been dormant for more than two decades, has been operating since last year. The city’s fair employment wage/living wage was raised for the first time in nearly two decades.
“After hovering at $10 per hour since 2006, City Council increased the wage to $15.33 in 2023,” said Molly Bryden, a researcher at Policy Matters, who is providing the board with economic and other data. “It was hovering at $10 for a bit too long, and eventually became ineffective and kind of obsolete because the state’s minimum wage surpassed it.”
Ashton said many workers for businesses with city contracts got hefty pay hikes when the city resumed adjusting the fair employment wage annually.
“Some of these people were making 12 or 13 bucks an hour and now they are guaranteed $15.85,” he said. “When people are making that amount of money, three bucks an hour is a massive percentage income increase.” That increase is between 22% and 32%.
These laws can help Cleveland grow its middle class, but…
Chaffee, the law school professor, said growing the middle class is complex. It ranges from consumers demanding that companies treat employees fairly or risk losing their business to unionizing more workplaces. Union members’ wages are higher than nonunionized workers, according to the federal Bureau of Labor Statistics.
“Collective bargaining tends to bring up everybody and not leave as many lower-income workers behind,” he said. “Unions are about making sure that those without power, in fact, do end up with some power.”
Jonathan Ernest, an assistant professor of economics at CWRU’s Weatherhead School of Management, said stepped up enforcement of the laws can be helpful for some workers, but is unlikely to lead to overall wage increases. Employers are apt to give lower paid employees raises to bring their pay in line with their higher paid colleagues. The higher paid employees usually don’t receive raises and the employer often becomes skittish in making future raises, Ernest said.
“The wage gap decreases, but not because wages go up for everyone to even things out,” he said. “Rather, raises become smaller or rarer, because now a raise for one worker means a raise for all workers at the level.”
Stepping up enforcement of the wage theft law will potentially raise awareness about the illegal practice, Ernest said. But, he said, this won’t necessarily lead to more workers filing complaints, including with the Ohio Department of Commerce. They may find the filing process too difficult to do on their own or they may not be able to afford a lawyer to help them. Advocates say they are prepared to help such workers. The Northeast Ohio Worker Center runs a wage theft clinic, which is among the places in Greater Cleveland where people can get free help.
Chaffee said in order for the laws “to create meaningful long-term change, there probably has to be meaningful long-term enforcement.”
Westbrook believes there will be.
“The mayor and city council have been very pro-worker,” she said. “I think they understand that policies that support workers and policies that support families, support our city.”