The Minnesota Supreme Court decision against forcing Minneapolis to allow a direct vote on a $15 minimum wage is a welcome ruling that reaffirms representative democracy in that city.
The justices were silent on the higher minimum wage itself, because the issue before them was much broader: whether the Minneapolis city charter could be used to bypass the council elected to make policy decisions.
The court’s ruling turned on one salient point: State law allows any municipal charter to create a provision for ordinances to be submitted by petition for a popular vote. But the Minneapolis charter not only did not do so, it explicitly vested in the City Council alone “general legislative and policymaking authority.”
The Supreme Court provided much-needed clarification that should put to rest future challenges to the council’s authority over policy. The justices concluded, correctly, that a district court judge erred in an earlier decision and that the Minneapolis charter, in its current form, has limits. It cannot be transformed into a vehicle for putting every major policy decision to a popular vote. If organizers have the will, they can attempt to amend the charter to allow such initiatives.
But the issue of a $15 minimum wage is not going away, and Minneapolis residents would do well to consider the full ramifications of requiring every employer in the city to phase in a minimum wage that would be 63 percent higher than the current state minimum of $9.50. Advocates say they will push for an ordinance to be adopted by this November. That would be a mistake. This is a major decision affecting the city’s economy and the mix of businesses in it, and it requires careful consideration of the facts and possible unintended consequences.
In their zeal to lift the living standard of minimum-wage workers, advocates risk putting the city at a competitive disadvantage with those only too eager to welcome businesses looking to escape the mounting labor costs in Minneapolis. The fact is, Minneapolis is hemmed in by well-developed suburbs eager to add businesses and jobs to their property tax bases, to say nothing of neighboring St. Paul.
One-size-fits-all rarely works when it comes to wages. Even the state, in its push to raise the minimum wage in 2014, made accommodations for small businesses, seasonal workers and teenage employees. And while some sought an even higher wage, the state settled on one that was $2.25 higher than the federal minimum of $7.25.
A $15 minimum would be a brutal adjustment for small businesses that would have to relocate to be able to hire workers at the state-set $7.75 minimum for such employers. Many employers would no doubt adjust to the arbitrarily high $15 minimum by raising prices, cutting jobs or both. That would cause a disproportionate amount of pain for the lower-income people whom advocates of the $15 wage are trying to help.
Many employers already pay above the state minimum because of an increasingly acute worker shortage. And wages that could raise the standard of living for Minneapolis’ poorest are worthy of consideration in a city where affordable housing is all too scarce. But a legal requirement that employers pay more must be balanced against the other factors that keep a local economy humming.