The wide range of opinions expressed by residents, employers and workers in recent weeks revealed just how divided St. Paul remains over raising the hourly minimum wage to $15. Passionate speakers from both the pro and con camps showed up at community meetings and rallies to appeal to city officials.
The level of disagreement indicates that more work should be done to reach a compromise and avoid unintended consequences. Still at issue, for example, is how the $15 wage would affect student workers at private colleges and universities. Some schools have said they would be forced to offer fewer work-study jobs, reduce hours or raise tuition.
The St. Paul Minimum Wage Study Committee, led by the nonpartisan Citizens League, recently recommended three options to achieve a $15 minimum wage within seven years. The committee came to no consensus over how to include servers and other tipped workers, student workers at private colleges or health care industry employees. Of the three possibilities, the one with the most support would phase in the higher wage over five to seven years. Exemptions would include city-approved youth training and disability job programs, but not tipped workers.
Last year, Minneapolis adopted a $15 minimum hourly wage for businesses that will be phased in and completed by 2024. Two years ago, while it was still a proposal, the Star Tribune Editorial Board argued that Minneapolis should reject the idea. We’d prefer that St. Paul drop the proposal as well.
However, Mayor Melvin Carter and some other city officials have said they’re committed to the pay change and vow to make it law by the end of this year. Carter made the wage hike central to his campaign, and he says the citizens who overwhelmingly elected him support the increase.
Nevertheless, the final version of St. Paul’s ordinance should include exceptions that help strike a better balance between St. Paul workers and employers. The ordinance should:
• Acknowledge the value of benefits such as health care.
• Consider the so-called “cliff effect” in which people with increased wages might no longer qualify for government benefits.
• Take the higher cost of doing business in the city into account. Though economists have mixed views, many acknowledge that higher minimums can lead to fewer jobs or hours for unskilled workers — the very people such proposals are supposed to help.
In addition, St. Paul’s hourly pay mandate should include perhaps the most controversial of all carveouts — a tip credit. The mayor and council could write the law so that employers can pay tipped workers less than the potential $15 minimum because many could make up the difference in tips. Proponents of the credit rightly say that is the best route for restaurants and other businesses that could face dramatic, potentially negative effects. Allowing the credit, those businesses say, would help them level differences between their tipped and nontipped workers.
A Hennepin County district judge ruled in March that the state’s minimum wage law doesn’t preclude municipalities from setting their own minimums. But the court’s affirmation of legal standing doesn’t make it the best policy. St. Paul city officials have the opportunity to do better than Minneapolis by limiting the amount of unintended damage.