Earlier this year, the Minneapolis City Council adopted a $15 minimum wage, scheduled to be phased in over five to seven years. St. Paul leaders are discussing taking the same action sometime in 2018. Those who want to see St. Paul thrive should hope that after careful examination of the issues, city leaders will come to a different conclusion.
Before the midsummer vote in Minneapolis, the Star Tribune Editorial Board argued that $15 would be an unrealistic hourly wage for the city, making it a less competitive island in a sea of surrounding communities with $9.50 and $7.75 minimums. Yes, workers deserve decent wages, but it’s also important to consider the negative, and perhaps unintended, outcomes of unrealistic wage mandates. Some of those outcomes — such as increased use of automation, reduced hours and lower head counts — can be especially painful for the same lower-wage workers that such mandates are supposed to help.
St. Paul officials are wisely taking more time to consider those consequences. The council has commissioned the nonpartisan Citizens League to gather information and report back during the next two months. The organization is conducting feedback sessions with a wide range of citizens, workers and employers to give the council questions to consider. That list ought to include:
• Should there be carveouts for certain-sized businesses, youth workers or various industries instead of a one-size-fits-all hourly wage?
• Should a credit be established for workers who receive tips?
• Is $15 set in stone, or should another amount be considered? Before the Minneapolis vote, a city staff report recommended that the council consider a new minimum between $12.49 (based on wages throughout the region and potential negative impact from forcing additional costs onto employers) and $15 (reflecting what it called “the current national trend”).
• What are the possible consequences of St. Paul joining Minneapolis and becoming a twin island of higher minimum wages in the region? Would increased competition for the jobs hurt current lower-wage workers? Would some businesses choose to relocate?
In a statement e-mailed to the Editorial Board, the St. Paul Area Chamber of Commerce said that while its members share the desire to reduce poverty, they are “conscious of unintended consequences’’ that a minimum-wage change like this could bring, both for the business community and for workers. The business group supports a “thorough, measured and inclusive conversation’’ — as well as advocating for ways to help increase worker access to higher-paying jobs.
During the recent mayoral campaign, all of the leading candidates, including Mayor-elect Melvin Carter, supported a $15 minimum. Carter and some City Council members have said they believe a mandatory wage floor is one of the best ways to help the 22 percent of St. Paul residents living below the poverty line. The newly elected mayor has said the wage hike will be a priority as soon as he takes office in January.
To some, that makes the same wage change approved in Minneapolis inevitable across the Mississippi River. But it doesn’t have to be if the mayor and other city officials listen to all stakeholders, thoroughly examine the issues and consider a more nuanced approach.
St. Paul has the opportunity to adopt a more realistic policy that better balances the needs of workers and employers.