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MN2020 - Tuesday Talk: What’s the right minimum wage for Minnesota?
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Tuesday Talk: What’s the right minimum wage for Minnesota?

January 28, 2014 By John Van Hecke, Publisher

Next month, Minnesota's legislators will consider multiple minimum wage proposals, ranging from doing nothing to increasing the state minimum wage to $9.50 an hour, or even higher.

Too many Minnesota workers make as little as $5.25, a full two dollars an hour lower than the federally-mandated minimum, because of carve outs in state law. Minnesota is over-due for a raise but what's the right hourly wage? Is it $9.50? Should it be more, even higher than SeaTac, Washington's recent voter-approved $15 per hour minimum?

Tell us what you think Minnesota's minimum wage should be and why.

This morning from 8-9:30am, Ty Moore, a $15 an hour wage proponent, will be available for a discussion on the appropriate minimum wage rate.  

 

Post your comments or questions in the box below, scroll down to see the ongoing conversation, and use "refresh" to see new comments.

Thanks for participating! Commenting on this conversation is now closed.

34 Comments:

  • Mark Bannick says:

    January 28, 2014 at 8:49 am

    I think the minimum wage should be raised. More importantly, I thiink the “tipped credit” wage ought to be abolished all together. The tipped credit wage is set at $2.13. If you raise that to just the $7.25 minimum wage, a full time (2080 hours/year) retaurant worker will earn $10,649.60 more per year. That’s a year of rent for most people. Why should retaurants not be required to pay this wage? Because they can’t afford it? Please, spare me. It’s the workers who are supplementing the business, not the other way around.

    • Joe says:

      January 28, 2014 at 9:09 am

      Minnesota’s tipped workers actually do make a base minimum wage higher than the $2.13. The Raise the Wage campaign aims to ensure that whatever the new minimum wage is it will apply to tipped workers.

      • Mark Bannick says:

        January 28, 2014 at 9:14 am

        I have not heard that from the campaign. Make it a “talking point” because no news media is reporting that.

        • Joe says:

          January 28, 2014 at 9:21 am

          Mark, we generally say it at coalition events. But for the sake of time, sometimes the news reports cut the list of provisions in the bill down to just $9.50.  If you’re a tipped worker, we’d love to hear your story. We’re actually looking for tipped workers to join us at our press events.

  • Ty Moore says:

    January 28, 2014 at 9:01 am

    In Seattle there is a growing movement for a $15/hr minimum wage, which has pushed a majority of labor leaders, the mayor, and many on Seattle City Council to come out in favor of the idea. Seattle is poised to achieve the highest min wage in the country this year. Should we follow suit in MN, or at least in our urban core where rent and cost of living are rising faster than incomes?

  • herb davis says:

    January 28, 2014 at 9:09 am

    $15. is closer to living wage!

    • Ty Moore says:

      January 28, 2014 at 9:17 am

      There are different methods used to calculate what a living wage is, but by almost any calculation $15 barely cuts it for a single income earner with even one dependent. And a very large proportion of low-wage jobs are not full time. Check out MIT’s living wage calculator for Hennepin County. http://livingwage.mit.edu/counties/27053

  • Joe says:

    January 28, 2014 at 9:16 am

    Minnesota 2020 is part of the Raise the Wage Coalition, a broad (and growing!) coalition of community, faith, labor, non-profit and service-based organizations working together to: Raise the minimum wage to $9.50 by 2015; ensure the minimum wage keeps it’s value by indexing it to inflation, conform state law to reflect the federal 40 hour work week and twelve weeks of family leave, protect tipped workers from having their wages cut.
    While the coalition generally believes $9.50 is a good starting point for the new minimum wage, having discussions that explore higher minimum wage options is important for policymakers to hear.

    • Ty Moore says:

      January 28, 2014 at 9:26 am

      It is excellent that the idea of indexing the minimum to inflation appears to be more widespread in the current debates on raising the minimum wage in states, cities, and at the federal level. This at a time when many employers are systematically trying to rip out real COLA (cost of living adjustments) agreements from union contracts.

  • Steve Fletcher says:

    January 28, 2014 at 9:23 am

    Ty, what are folks in the Fight for 15 coalition saying to people who raise concerns about jobs relocating if the wage raises too much?  Is there a danger of increasing unemployment if we raise wages too far ahead of our upper Midwestern neighbors?

    • Ty Moore says:

      January 28, 2014 at 9:31 am

      That argument is most frequently marshaled in a fear-mongering and highly exaggerated way, though of course we do have to soberly assess and plan responses to how raising the minimum would impact the local jobs market and private sector investment. But what the fear-mongerers typically avoid discussing is that the big bulk of low-wage jobs are in the service sector, and Target isn’t just going to close down their stores in MN because higher wages cut into their profit margin. Some with the fast food chains, the hotels, etc. Meanwhile most manufacturing jobs - those more prone to moving - already pay close to or higher than $15/hr.

      • Ty Moore says:

        January 28, 2014 at 9:57 am

        But the question you pose is real. Our union sisters and brothers, particularly in manufacturing, can tell endless stories of how they have been forced to accept terrible concessions to their wages, healthcare, and retirement under the real threat of a company moving production to low-wage areas and employ non-union labor. Big business has engineered and global race to the bottom. They make government compete to lower corporate taxes (or give subsidies i.e. corporate welfare!), to lower environmental regulations, labor regulations. They make workers compete against one another for lower wages. As a society we have to ask ourselves wether we accept this market system logic, or wether we are prepared to take the necessary measures to put the needs of working people over the profit-driven policies of big business. Because at the end of the day, the right-wing has a point. If we raised up all workers in the US to a living wage, and taxed business enough to provide a real safety net for all, the big business would flee to greener pastures in China, Latin America, etc. There are stop-gap regulatory measures, tariffs, etc, but these alone won’t fundamentally alter the market logic. Throughout history and around the world the main serious alternative to allowing the market to dictate wages and investment is public sector intervention, taking key sectors of the economy into public ownership.

  • Joe says:

    January 28, 2014 at 9:24 am

    Ty, when you were running for city council, how did you bring up the wage issue and what did folks generally have to say about minimum wage, living wage and wage stagnation?

    • Ty Moore says:

      January 28, 2014 at 9:37 am

      In Ward 9 in South Minneapolis where I ran for city council, there is over 24% poverty, high unemployment, and a large number of low-wage workers in precarious, part-time jobs. So the idea of a $15/hr minimum wage was hugely popular among most folks we talked to. Of course genuine questions came up because people are exposed to all the business propaganda about how raising wages will result in equally large price rises, etc, but for most people we were able to cut through this quickly and win support for the idea.

  • Joe says:

    January 28, 2014 at 9:32 am

    By the way, getting at least $9.50 done in Minnesota will go a long way for lifting wages in neighboring SD. They have a ballot measure coming up in the 2014 November election that raises the wage to $8.50, tied to inflation and pays tipped workers half of the going minimum wage. This provides us a great opportunity to lift wage equity in the region.

    • Jeff Van Wychen says:

      January 28, 2014 at 9:52 am

      Estimates from the Economic Policy Institute indicate that 357,000 Minnesotans would experience either a direct or indirect increase in wages as a result of going to a minimum of $9.50 per hour.  That would increase the purchasing power of these earners by an estimated $472 million statewide, according to EPI.  MN 2020 has done an analysis of the impact of the $9.50 minimum for each of Minnesota’s 67 Senate district which shows an estimating increase in purchasing power per district ranging from $5 million to $14 million.  That sort of additional consumer demand would give a needed boost to the recovery.

  • R. Nepper says:

    January 28, 2014 at 9:34 am

    It is very easy to push for a high minimum wage (as long as someone else pays it!). If you have a business that can afford it, then go ahead and pay any high wage you care to, but don’t impose it on others.

    Any minimum wage should have a much lower level for those under 18 years of age to help create more jobs for entry level workers (so they are less likely to get into crime, drugs or gangs)

    A minimum wage might not be needed if Minnesota passed the “Use or Return’ law (SF 21) to stop employers from claiming and then SCUTTLING unwanted employee inventions (so no one can create new jobs with them!) If passed, this law could produce so may new jobs that employers would need to pay MORE than the minimum wage to get the help they needed (but employers would then have lots of new business to afford it)

    • Ty Moore says:

      January 28, 2014 at 9:44 am

      I’m skeptical of the argument that low-wages lead to job creation. Sure, if you are a third world country and can beat the “China prices” for labor, maybe Nike will built their next sweatshop in your tax haven free trade zone, but in the US the key reason business investment remains extremely low is because consumers are strapped and can buy back the products they produce at the same rates as in the past. Big business in the US is sitting on trillions of reserves that they refuse to invest, or only invest in the speculative casino economy which doesn’t create jobs. Raising wages seems a much better route to encouraging investment and job creation than further erosion of workers buying power.

      • Jeff Van Wychen says:

        January 28, 2014 at 10:11 am

        I concur with Ty.  Research from the Economic Policy Institute shows that a nationwide $10.10 minimum wage will create 85,000 new jobs and add $22 billion to the American economy.  Any jobs lost would be more than offset by the increase in purchasing power among low wage workers; because these workers tend to spend a large portion of any increase in wages, the result would be increased consumer demand, which would translate into increased production and more job.  Also, keep in mind that low-income households tend to spend a larger portion of their disposable income within the state and local economy, so a good share of the increased demand from a minimum wage increase would benefit the Minnesota businesses.

  • lee egerstrom says:

    January 28, 2014 at 10:07 am

    Here’s a reminder that news reports this morning say President Obama will announce a $10.10 minimum wage for workers in new government contracts. This executive order will be announced during his State of Union message tonight, and will show his intent to go around logjams in Congress. Don’t know many of the details, but this should push momentum for raising the minimum at both state and federal levels.

    • Jeff Van Wychen says:

      January 28, 2014 at 10:21 am

      Even many conservatives are getting on board for a minimum wage increase, including Ron Unz (former publisher of the American Conservative), Bill O’Reilly (Fox News), and Phyllis Schlafly (Eagle Forum) have voiced support for upping the minimum.  Furthermore, a recent Gallup poll shows that 58% of self-identified Republicans favor an increase in the minimum wage.  Perhaps the U.S. House won’t be as much of a roadblock as we feared.  (Occasionally it doesn’t hurt to be optimistic!)

    • Ty Moore says:

      January 28, 2014 at 10:30 am

      That is good news. It seems clear that the central political issue in 2014 will be the deep economic and racial inequities plaguing our society. I think we can substantially credit Occupy Wall Street, the fast food strikes and other low-wage worker organizing, and the election of socialist Kshama Sawant in Seattle for putting this issue so firmly on the agenda. Obama is responding to pressure from below. The more sober sections of the political establishment understand the political dangers (for their system). The most recent article by Robert Reich, the former Secretary of Labor in the Clinton Administration, offers sharp warning to the business and political elites. Reich predicts that, despite the lack of serious action to address the deep inequalities in US society…

      “Change is coming anyway. We cannot abide an ever-greater share of the nation’s income and wealth going to the top while median household incomes continue too drop, one out of five of our children living in dire poverty, and big money taking over our democracy. At some point, working people, students, and the broad public will have had enough. They will reclaim our economy and our democracy. This has been the central lesson of American history. Reform is less risky than revolution, but the longer we wait the more likely it will be the latter.”
      —See entire article here: http://robertreich.org/post/74519195381

  • Kip Wold says:

    January 28, 2014 at 10:18 am

    I don’t know what the minimum wage should be, but in supposedly the world’s richest country, the government should not have to subsidize employers profits by providing food stamps, healthcare, housing, etc. to their workers.  If a job needs to be done, it needs to be paid a livable wage.  Anyone who disagrees and says “They ought to be happy to have a job.” has a slave masters mentality.

  • Jeff Van Wychen says:

    January 28, 2014 at 10:29 am

    U.S. Census data (summarized in a Nov. 18 MN 2020 article) shows that median earnings in Minnesota have increased by just 8.1% from 2005 to 2012—less than have the rate of CPI inflation.  This further underscores the need for an increase in the minimum wage.  Increasing the minimum won’t entirely solve the problem of declining real wages, but it will help.

  • Rachel says:

    January 28, 2014 at 10:38 am

    Sheila (via Twitter) says: “It was $3.85 when I worked at Burger King back in the day at age 14- had another job 4 months later.”

  • Ty Moore says:

    January 28, 2014 at 10:52 am

    Thanks MN2020 for inviting me this morning. I’ll check back in here later this afternoon to comment if there are any further thoughts or question people want dialogue on. Check out 15Now.org to get a fuller picture of my views on the issues.

  • Judy Daniel says:

    January 28, 2014 at 11:25 am

    $15 per hour is a minimum wage. It (barely) gives people access to food and shelter and a self-sustaining life style. They’d need to work a full 40 hours to get that; if they work less that 40 hours, they remain fragile.
    Step up business owners. If you can’t afford $15 per hour, you shouldn’t be in business.
    If you don’t step up, you lay the burden on tax-payers (even those who don’t make $15 per hour) to subsidize your business.

  • Christeen Stone says:

    January 28, 2014 at 11:30 am

    I came to Minnesota in 1940 (age 19) from Texas, still a right to work (cheap) state. I worked at a exclusive family owned
    Joskes Department Store. I worked a six day 54 hour week for $10 dollars per week, no paid benefits. I went to work at WT Grants for 42 hour week and $20. Difference, although WT Grant’s was not Union, they paid Union wages. We were threatened with loss of job at Joskes if we even talked to the Union. The quality of life here drew me back to Minnesota to live when my husband was shipped overseas in Patton’s Army in 1944. It is a wonderful place to live, but heart breaking to see the changes. We must have decent adequate living wages for everyone, living in poverty is not an option.

    • Peter Rachleff says:

      January 28, 2014 at 4:00 pm

      Sorry to be late to the conversation.  Just getting to my email at 3pm.  I’d like to raise a somewhat different perspective—that the important issue here is HOW the minimum wage is raised.  If workers are organizing and mobilizing around the vision of $15, then it is this MOVEMENT that progressives should be supporting.  I am much less interested in politicians or bureaucrats decreeing a raise in the minimum wage, and, frankly, turned off from those who would wrap themselves in a progressive mantle and then quibble about whether the level should be $9.25 or $10.10.  A HUGE gap has opened in the past three decades between workers’ productivity and their compensation, with the 1% raking in the substance of this gap.  Workers who are rallying around $15 an hour deserve to be supported, and their movement can prompt other movements, organizations, and campaigns to address the runaway inequality in the US (and the world).

  • Sandra Carney says:

    January 29, 2014 at 10:12 pm

    $15 / hour

  • Jane says:

    January 29, 2014 at 10:35 pm

    Can people in larger metro areas support themselves and their families on $15/hour?  I read somewhere that if minimum wage had kept up with inflation, it would now be around $22/hour.  Let’s raise it to that.

  • Joe says:

    January 30, 2014 at 11:18 am

    I think there should be a separate minimum wage for those who are in high school and those that are supporting a family or those living on their on.  Those living on their on should be able to live with out struggling to get with what they need.  This will also, hopefully keep the economy growing and we won’t lose as many jobs.

  • David Schmidt says:

    February 1, 2014 at 7:36 am

    A change in minimum wage laws would likely have less effect, whether negative or positive, than most people would like to see. Salaried people would not be effected. Skilled employees making farm more than the minimum wage likely wouldn’t be effected. Employers pay minimum wage because they can. If they can easily find replacement workers for that hourly wage-why would they pay more [altruism is a nice, if limited sentiment]? A minimum wage artificially bends the wage to labor value curve. The results are always less clear and less measureable than liberals and conservatives like.

    A raise in minimum wage would probably be seen in various ways with each way likely being a small difference: 1) the business may be able to “eat” some of the extra labor costs, 2) company hourly minimum wage employee labor hours may be reduced [in minimum wage intensive industries such as fast food and big retail labor hours are being constantly being adjusted by management], 3) the cost of the product/service would likely increase [due to inflation, consumers are used to seeing frequent 1/2 to 3% increases in goods & services. What’s another 2%?].  4) The federal government will drool over the increase in FICA taxes [remember, it’s whatever the increase in wage is plus 15% for FICA]. 5) Employees will be hit with their FICA tax on that increase. Plus, for some employees, we’re looking at additional income taxes. Employees may only see 80 cents on the dollar of that wage increase. 6) The additional net benefit to the macro economy would be somewhat reduced by the amount of opportunity costs incurred by whatever extra dollars the employer and the consumer is forced to spend on the increased wage. If the cost of the monthly grocery bill increases by $X per unit of time, that $X is now money that I won’t have to take the family out to eat.