Our view: Raise minimum wage, but be careful how highAt parades and rallies and in meeting halls and elsewhere, “raise the wage” — as in the minimum wage — has become quite the buzz cry. In Minnesota there certainly is reason and room for a pay bump.
At parades and rallies and in meeting halls and elsewhere, “raise the wage” — as in the minimum wage — has become quite the buzz cry.
In Minnesota there certainly is reason and room for a pay bump. Families and individuals struggling to thrive would benefit. The last time the Gopher State raised its minimum wage was in 2005, and then by only a dollar, from $5.15 to $6.15 per hour.
Minnesota’s minimum wage lags embarrassingly behind the Dakotas, Iowa and Wisconsin. All of our neighboring states match the federal minimum wage of $7.25 per hour. Minnesota is one of only four states in the country with a minimum wage lower than the federal wage, itself the target of a likely increase. And had Minnesota’s minimum wage kept pace with inflation, it’d be at $10.55 per hour right now.
So raise it.
And count on the DFL-led Legislature and DFL Gov. Mark Dayton to do just that this coming session. Like same-sex marriage last year, the minimum-
wage issue is a high priority for the party this year. The only real question is how high they’ll go. Can a party with a tax-and-spend reputation show restraint? Their passage last year of $2.1 billion in new taxes, including some very business-unfriendly taxes, did little to dissuade their rep — or suggest optimism for a reasonable minimum-wage increase.
For the good of the state, and especially our business community, the DFL needs to be careful not to overreach when raising the wage.
For a time during the last legislative session it appeared a huge, nearly 55 percent,
minimum-wage increase, to $9.50 per hour, was going to be made law. The House supported it, and so did the governor. But the Senate considered a more-reasonable but still greater-than-26-percent increase to $7.75 per hour. In the end common ground couldn’t be found.
So what will the Legislature consider this year? Expect the $9.50-per-hour proposal to be back with abandon. It’s the number the DFL, the public-
employee union AFSCME and others, including the Jobs Now Coalition, are pushing and pushing hard. They say it’s the minimum wage that’s necessary to lift out of poverty families with two minimum-wage earners.
“Hard work should pay. Anyone working full-time should not have to live in poverty,” Jennifer Munt of the AFSCME office in St. Paul told News Tribune editorial board members last month. “The intent is to make work pay so there’s an incentive to work. … This is unfinished business from last year.”
An increase in the minimum wage to $9.50 per hour would give much-needed raises to 360,000 Minnesota workers, Munt and others with the coalition argue. That’d be good for the state economy, they say, because, “When you put (money) in a low-wage worker’s pocket they spend everything they can get,” Munt said.
The owners of small businesses seem to be the most threatened by a minimum-wage hike, but coalition members point out that 77 percent of small businesses are owner-
operated and have no employees.
“What we’re trying to do is put the squeeze on the big corporations that are putting small, local places out of business,” Munt said. “This would help the working poor. … The way out of poverty is through wages. We’re committed to living wages.”
“We don’t want to kill small businesses,” Dennis Frazier, an executive board member for AFSCME, said. “They’re in the same plight as low-wage workers.”
As passionately as such arguments can be made, the governor and Legislature this coming session can be sensitive to the state’s jobs-creating business community by balancing their desire to put more money into low-wage workers’ pockets with the need to keep businesses in business.
“A hike to $9.50 would give Minnesota by far the highest (minimum) wage in the country,” Mike Hickey, the Minnesota director of the National Federation of Independent Business, said in a commentary he wrote this summer and provided to the News Tribune Opinion page during an interview in October. “At $9.50 per hour, Minnesota’s minimum wage would be more than 30 percent higher than the rate in the four neighboring states. Think about that: The cost of creating an entry-level job in Minnesota (would) be 31 percent higher in Minnesota than anywhere else in the region and would create a competitive disadvantage for companies that employ minimum-wage workers.”
The minimum wage, Hickey continued, “was never intended to be enough to provide for a family, especially a family of four, and it never can be. It is the starting wage from which workers are intended to move up after they gain experience, better skills and ultimately better-paying jobs. … Minnesota does not need to enact an excessive increase in the minimum wage that would give us by far the highest wage in the country. Hopefully, a more moderate course will be charted.”
And here’s another thing for the governor and Legislature to keep in mind: “Our restaurant industry would be dramatically impacted by a minimum-wage increase that doesn’t account for tips,” Dan McElroy, executive vice president of the Minnesota Restaurant Association, told the News Tribune Opinion page this month. “According to a Minnesota Department of Labor and Industry survey, 72 percent of minimum-wage earners work in eating and drinking establishments. … Tips are treated as income for every purpose under law except minimum wage.”
Members of Minnesota’s Jobs Now Coalition want the Legislature to pass a minimum-wage hike in the first two weeks of the session. But why so fast? Clearly there is much to consider — especially if any concern at all is given by the DFLers in charge not to overreach.