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Made in Minnesota 2013: Fair Retail Wages Strengthen Local Economies

November 24, 2013 By Lee Egerstrom, Economic Development Fellow

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Many of the nation’s richest retailers count on poverty level wages to pad their multi-billion dollar profit margins, stripping workers’ purchasing power and undermining local economies. This holiday season, Minnesota 2020 is urging shoppers to reward merchants that provide fair wages and benefits, consistent working hours, and reasonable sick and vacation time.

Using Minnesota Department of Employment and Economic Development data, Minnesota 2020 found that the three sectors most closely associate with the holiday season—department, clothing, and sporting goods stores—pay a median wage of just $9.05 an hour, meaning half of the workers make below that level.



This wage is below the poverty line for most Minnesotans and far short of Minnesota’s living wage for a family of four, which Jobs Now Coalition estimates at roughly $13.55 for two adults working fulltime.

With 70 percent of the nation’s economy based on consumer spending, it’s critical for shoppers to realize the power their dollars have in bringing economic justice for workers at the lowest rung of the wage scale. The same way shoppers could demand certain goods appear on the shelves, they can start asking merchants critical questions about how they treat their workers.

The report lists key questions for consumers to ask stores they frequent, such as:

  • Is the store’s minimum wage at least $9.50? (the state house’s proposed new minimum wage)
  • Are full-time workers entitled to sick leave and paid vacation?
  • Are enough full-time positions made available?
  • Is there consistent and predictable scheduling for part-time workers?

These social screens aren’t new, the report adapted them from socially responsible investing models common among faith-based organizations and pension funds and responsible dining guides in Wisconsin, San Francisco, and New York City.

Raising Minnesota’s minimum wage is one way to bring justice for workers immediately and help strengthen the economy. A $9.50 minimum wage would put $470 million in purchasing power into the hands of 357,000 Minnesota workers, helping stimulate local economies. Seventy-seven percent of these workers are 20 years old and older.

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  • Bob Sixta says:

    November 24, 2013 at 7:21 pm

    Wonderful report, and very timely.

  • Lee says:

    November 25, 2013 at 8:18 am

    The net effect of the raising of the minimum wage will be higher consumer costs.  The greater the cost of selling a widget, the more the company must charge to recoup those added costs. The effect is that even if wages are higher the people can’t purchase any more because the cost of the purchased items has also risen.  You can’t expect companies to absorb the higher costs just to be nice people, because those companies have bills to pay and extremely high taxes real estate and corporate income taxes to pay, which intern also supports the lower income folks.

    • Brad says:

      November 25, 2013 at 4:36 pm

      It will increase the cost associated with minimum wage widgets, but it will allow minimum wage employees to have more purchasing power related to products that use higher-wage production. Wages for $10.00/hour jobs may increase to $12.00/hr after the $8.00/hr gets raised to $10, however this should have little effect on goods that are produced using skilled $20/hr labor.  They may even be able to purchase REAL Property, not just consumables and have something long-lived to show for all of their work.  All I know is my mouth is under the faucet and but nothing is trickling down.

    • Dan Conner says:

      December 2, 2013 at 4:27 pm

      Raising the minimum wage usually affects the price of a product very little.  First, wages generally comprise a small percentage of the product cost.  Second, if wages had such a dollar-for-dollar affect on product cost, then it would make sense to limit executive wage and salary increases.  Many times, they receive more dollars in increases than labor.  In addition, if a free market capitalist believes in the competitive economy he/she touts, then they must remember the economic principles taught in schools:  employers are resistant to pass on increased costs to consumers when those increased costs would cause a loss of sales in a competitive economy.  In that regard, the company would be prone to absorbs the increased costs or look in other areas to make cost cuts.  Consequently, increases in wages for workers many times has the affect of making a company more efficient.

  • Rotary12 says:

    November 25, 2013 at 9:42 am

    And what gives you the right to set a minimum wage?  Can you guarantee that a given individuals to the business is worth that?  Minimum wage jobs are NOT head of household jobs.  If someone is trying to support a family on minimum wage then there are other issues that need to be addressed first, like education and training.

    • Maria says:

      December 2, 2013 at 2:51 pm

      Maybe minimum wage jobs are not head of household jobs, but many heads of households are working minimum wage jobs. Same with retired folks.  An interesting thought to consider is if there should be a maximum wage (no, one individual does not have that right, but as a democratic society, we can choose to enact that, the same way we as a group choose to have a minimum wage.) Does an executive who gets paid 1.6 million/yr ($800/hr) really contribute 100 times more to the company than the employee gets $8/hr? There’s only so much productivity you can achieve in an hour.

    • Dan Conner says:

      December 9, 2013 at 10:18 pm

      Authority for setting minimum wage resides with the Federal and state governments.  Since government is of, by, and for the people, i guess you might say that means we CAN set minimum wage for wroker…any worker.

  • AugustaKing says:

    November 25, 2013 at 10:38 am

    The problem is Congress has raised their own salaries 17 times while only raising the minimum wage 3 times. Even they think they don’t have to play by the same rules and take advantage of subsidies and tax breaks only the rich enjoy. Investment income shouldn’t be valued more than wages. There should be transaction fees and taxes on funds that haven’t created the jobs they were intended to.

  • TONY says:

    November 25, 2013 at 11:40 am

    going from $7.25 to $9.50/hour is a 26% increase but to Wal-mart is a few pennies per item sold. Studies have shown that the pay increase goes right back into the system o the net benefit is always a plus for the economy. If minimum wage of 1970 had been kept up w/inflation the minimum wage would be in the $14/hr range. Who gives the people the right to declare a minimum wage?  It’s called the vote. You know it’s that “we the people” thing…

  • Kevin says:

    November 30, 2013 at 1:19 pm

    The articles note that 77% of the minimum wage workers are over 20 years of age.  I am an employer of first time employees that are typically around 16 years of age, and have worked with this population for over 35 years.  Raising minimum wage at the levels being considered is not appropriate for new young workers who more and more come with minimal skills; who require lots of training on basic things like showing up on time/honoring a work schedule/putting in an hour’s worth of work for an hour’s worth of pay; and who have in general an over-inflated sense of employee value. Increasing minimum wage for this class of employees makes it even more difficult to provide a reasonable work environment where young workers can have a successful first work experience.  Some type of age-based exemption is needed.

  • Liane Gale says:

    December 2, 2013 at 1:29 pm

    Why should anybody have to work for less than it takes to make a living? This does not sound “fair” to me at all. Where should the individuals and families get the resources from, which they lack by making poverty wages (and $9.50 is still very much a poverty wage)? Same as before. Charity, welfare programs, 2nd and 3rd jobs, hunger, unsafe living conditions, unattended illnesses. Really, now? Is this the best Minnesota can do for its workers? I dare any of you supporting this poverty-level minimum wage to look into the eyes of any of the workers, and tell her that the fight is not about her dignity, it is just a political game.

    • Rotary12 says:

      December 9, 2013 at 5:13 pm

      Because they have no marketable skills and/or no work ethic.  Why would I pay someone who comes in late or not at all whose only skill is flipping burgers or pushing a broom more than minimum?

      • tony says:

        December 9, 2013 at 5:48 pm

        rotary: so you say all employees at burger joints have no work ethic, show up late & should be paid well below the cost of living in this state. Your argument is that they should only make minimum wage? maybe so, but shouldnt that minimum wage adjusted for inflation at least match what you made in high school? Or will that cut into your yacht fund??

      • Dan Conner says:

        December 9, 2013 at 10:14 pm

        It is pretty stupid to pay people who don’t come to work on time or don’t show up.  You fire them.  What kind of employer employees people with no work ethic?  It sounds like that employer business needs to fail.  It is certainly incompetently run.  Meanwhile, those workers who do come in and perform their assigned duties need to be paid enough to live.  The minimum wage needs to be increased to furnish a decent living.