Minimum-wage workers in Minneapolis and St. Paul got a raise Wednesday, in the middle of a pandemic that has stretched businesses thin and made employment precarious.
For workers, the hourly pay hike — up to $13.25 in Minneapolis and $11.50 in St. Paul — means they're one step closer to the $15 minimum that leaders in both cities approved in recent years. For employers, particularly those that are small and local, the new cost adds to an already difficult season.
"Small-business people are people," said B Kyle, president and CEO of the St. Paul Area Chamber of Commerce. "Our neighbors are being impacted in devastating ways right now."
Jonathan Weinhagen, president and CEO of the Minneapolis Regional Chamber of Commerce, said he asked City Council President Lisa Bender to consider delaying the July 1 pay increase, but got no response.
"Nobody's saying hit the brakes or repeal the ordinance — it really is just, could we defer it six months, nine months, while we head into the economic recovery," Weinhagen said.
In an interview Wednesday, Bender said her office checked their records and did not see any e-mails or calls from Weinhagen. She said she spoke to him several months ago, after the pandemic began, to remind him that the minimum wage increase was coming. She said she doesn't recall whether they discussed a delay at that point.
Bender noted that the increase occurs over several years, based on feedback city leaders got from businesses when they passed the ordinance.
"We are working really hard to support our small businesses through the pandemic and through the economic realities that are coming with COVID, but at the same time we know our working families in Minneapolis need support now more than ever," she said.
The Minneapolis council passed a $15 minimum wage ordinance in summer 2017, and St. Paul followed in late 2018. In Minneapolis, employers with more than 100 employees must now pay a minimum of $13.25 an hour; those with 100 or fewer employees must pay $11.75 an hour.
In St. Paul, "macro businesses" with more than 10,000 employees, along with the city itself, started paying $12.50 an hour Jan. 1. The July 1 wage increase applies to smaller employers: "large businesses" with more than 100 employees will pay $11.50 an hour; "small businesses" with up to 100 employees will pay $10 an hour; and "micro businesses" with five or fewer employees will pay $9.25 an hour.
Andre Best's North St. Paul-based home care company, Best Care, serves communities across the state. Its personal care assistants who are not working overtime make $13.25 an hour, regardless of where they work.
The challenge is overtime costs: previously in Minneapolis, Best was able to pay $12.25 an hour as a base wage to those who worked more than 40 hours a week. But as the minimum wage surpasses that, he has to pay more. Best said he's anticipating a $65,000 loss because of overtime costs between now and July 2021.
David Gorski, compliance supervisor in St. Paul's human rights department, said challenges that businesses are facing as a result of COVID-19 — and the potential for noncompliance with the minimum wage law — is "definitely an issue that's on our radar."
"We definitely understand it's a hard time for businesses. It's a hard time for workers of course, too," he said. "We're primarily here to make sure that people are getting the benefits that they've earned."
Low-wage workers, particularly in the food service industry, have already experienced job losses because of COVID-19. For those still working, "raising the minimum wage is still as important as it's ever been," said Eli Edleson-Stein, lead organizer with the Restaurant Opportunities Center.
"The history of too-low wages in our cities was the context for the kind of crisis that workers were launched into in March," he said. "Workers were always making too little, which meant that they couldn't save, which meant that any crisis of health or a familial crisis was also an economic crisis for people."
After being laid off from Bruegger's, Jaslyn Warren now earns $13.25 an hour as a part-time in-store shopper for Instacart. Though she's expecting a 25-cent raise, which will bring her above the Minneapolis minimum, she said it's not enough to keep up with rising living costs and stave off the stress of trying to make ends meet.
"You're always fighting to get ahead," she said.
Staff writer Liz Navratil contributed to this report.