Not that long ago a chamber president like Matt Kramer of the St. Paul Area Chamber of Commerce would join with just about everybody else in celebrating a new employer in town. It could be as modest as a half-dozen full-timers in the office and a crew of entry-level staffers in back doing the packing and shipping.
This new operation wouldn’t exactly be another 3M Co., but at least another business was doing a great thing for St. Paul, bringing some jobs to the community.
Now the opening of an operation with that kind of modest payroll won’t be greeted with celebrating. It may even be cause for complaint. The jobs it provides aren’t nearly good enough.
This change in thinking has happened just in the time since Kramer has been at the St. Paul chamber, going back to the summer of 2010. Since then the environment for employers in St. Paul has changed “100 percent,” he said.
Kramer is on his way to a new position at the University of Minnesota, so call this an exit interview with the head of what’s often said to be the biggest local chamber in the state. It’s a chamber we know well in our house, too, from when I was a member and through my wife’s service on its board and executive committee.
Kramer said it’s not that he’s eager to get out of St. Paul, just that he was attracted by a role at his alma mater. What’s happened in St. Paul is hardly unique, too. He scans the newspaper websites from other cities and can easily see the sea change in thinking about employers and jobs that’s happened in big cities across the country, with cities like Seattle leading the way by moving toward a citywide $15 per hour minimum wage.
Kramer pointed out that he’s not talking about a new era of conflict with City Hall, because as best as he can tell there have always been disagreements of one kind or another between the business community and the city. What’s different is the role jobs now play in these discussions.
In the past a City Council might have been skeptical of a project championed by the business community, on grounds it seemed like a boondoggle, but gosh those potential new jobs sure sounded nice. Or it might have raised property taxes on commercial and industrial property to close a budget gap, but not without members of the council managing to also say thanks for providing a lot of jobs.
Now the thinking is that some jobs seem a lot worse than having no jobs at all. That’s what led to a mandate for employers to grant a minimum sick leave in St. Paul, following the lead of cities like Minneapolis. And in the debate last year over this mandate the chamber didn’t just lose, it got pounded.
One suggestion from the chamber was to exempt part-time employees who made at least $29 an hour, an exemption mostly meant for the city’s important health care sector that hired nurse anesthetists and other professionals. That suggestion went nowhere.
As for the tone of the criticism directed at the city’s employers by the advocates for workers, Kramer said, “vilify is not too strong a word.”
Kramer pointed out that many employers share the goals of worker advocates, and even the chamber itself already had a fully compliant sick leave benefit. The additional cost is just the hassle of more municipal compliance. What seems to be coming next, though, a $15 per hour minimum wage as discussed in Minneapolis and passed elsewhere, would have a far bigger financial impact.
Advocates for workers are unwilling to wait for the labor market to lift wages and benefits. Yet they are only winning their argument in the central cities.
The problem for relatively small cities like Minneapolis and St. Paul inside a big metro area is that the lines that divide municipalities are basically artificial. The south side of Larpenteur Avenue is the city of St. Paul and the north side lies in Roseville. It’s the same place. And business owners do have options.
It’s not even worth talking about a St. Paul employer leaving for South Dakota, Kramer said, the odds of that seem so remote. What he does worry about, though, is seeing St. Paul move down the list for business expansions.
Companies with options closely evaluate and then allocate money where the expected returns are even just a tad greater. Even when the spreadsheet competition between St. Paul and another site ends in a draw and a citywide mandate like sick leave costs next to nothing, executives might lean away from a central city that’s starting to feel less than welcoming to business.
And a city like St. Paul needs every dollar of property tax base it can get.
“We have been trying really, really hard, the entire time I’ve been here, to remind people that job creation is just one aspect of the vitality of the business community,” Kramer said. “Because the commercial and industrial tax base pays for community vitality. Businesses don’t call the cops at 2 a.m. for a barking dog because there’s no one around. They don’t go play on the playground. Yet they pay for the cops at 2 a.m. and they pay for the playgrounds.”
In St. Paul about 28 percent of the tax capacity comes from commercial and industrial property. St. Paul still has a significant amount of industrial property, too, from a big paperboard maker at one end of town to a steel mill at the other.
To the credit of both political leaders and business leaders, Kramer said, “we don’t have any alternative facts in downtown St. Paul.” Even with the same set of facts, though, political leaders have made their call on policies like mandatory sick leave. They have sided with interest groups other than business.
“Having been in some of those meetings, there was this progressive attack of ‘You’re not good enough,’ ” Kramer said. “I wouldn’t mind hearing a counter narrative. ‘You’re not good enough. But thanks for the parks. Thanks for the rec center. And thanks for the 24-by-7 police and fire departments.’ ”