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As mayoral campaign begins in Minneapolis, candidates grapple with city-only minimum wage

Mayor Betsy Hodges
MinnPost file photo by Sarah T. Williams
Shortly after announcing her intent to seek a second term, Mayor Betsy Hodges laid out a change in her position on the minimum wage.

Sometimes, politicians lead. Other times they catch up.

On the issue of whether Minneapolis should have a higher minimum wage than the rest of the state, the city’s elected officials have been doing the latter, trying to make up ground on a movement started by grassroots activists. Now, those efforts — along with accusations of who got on the issue first and whether their support is complete enough — have spilled over into the fledgling 2017 race for mayor.

A shifting landscape

A higher wage is a popular issue in the city, especially among the DFL activists who will decide which mayoral candidate will get the party’s endorsement in Minneapolis. But the 2016 election reduced the chances for legislative action to increase the minimum wage statewide. If anything, the Republican-controlled Legislature is now more likely to try to block cities from doing anything on the issue at the local level.

That’s among the reasons why, shortly after announcing her intent to seek a second term, Mayor Betsy Hodges laid out a change in her position on the minimum wage. Hodges said she now supports the city moving ahead alone — she had previously wanted a statewide or regional approach — once a report and recommendation on a wage hike is completed by city staff, which should happen sometime in the spring.

“It is clear that the Minneapolis City Council will pass some version of a city-only minimum wage in the first half of the year,” Hodges said in a statement. But it is important, she added, “... if Minneapolis is going to lead on minimum wage, we get it right.”

Getting it right, she has decided, means having the same rules for tipped workers that are in the state law. Specifically, Hodges said the city rule should follow the state’s lead in not including a tip credit for restaurant workers, a provision that was controversial at the time the state measure was passed and remains a concern for restaurant owners. “The wage we pass must not hold our tipped workers back — most of whom are women — or set a new, harmful precedent that will hurt tipped workers statewide,” she said.

The campaign begins

It’s hard not to see Hodges’ statement as a shot at Jacob Frey, who on Tuesday became the fifth declared candidate (so far) for mayor of Minneapolis, joining Hodges, state Rep. Ray Dehn, former law professor and local NAACP president Nekima Levy-Pounds and Aswar Rahman, a filmmaker and user experience designer.

Though Hodges didn’t mention Frey by name (or any other opponents), the first-term council member from Ward 3 has been one of the most-active council members on the wage issue. He attended an early rally in the summer of 2014 that was part of a national call for action. And he has supported a study of the economic impacts of a higher wage in the city or county.

Jacob Frey
MinnPost photo by Peter Callaghan
Council member Jacob Frey

Frey has also raised questions regarding the tip credit aspect of a city-only wage. During a hearing in October, he asked the authors of the economic impact study whether a city wage could have different rules than the state law. Specifically, he asked, could the city allow a tip credit only on the incremental wages between the statewide minimum wage and whatever the city sets. Such credits would allow a restaurant to pay a lower, state minimum wage and use tips to guarantee that a server makes at least the city minimum wage paid to non-tipped workers. Tips above that threshold would be retained by the server.

After that October meeting, Frey said he was not making a proposal about the tip credit, but was simply asking questions. Such a move, however, would go a long way toward calming the concerns of restaurant owners, an influential group of residents whose complaints had forced the council and Hodges to shelve a proposal to require advanced scheduling for all workers.

In addition to highlighting Frey’s ambivalence about the tip credit, Hodges’ decision to take a hard position against the idea also served to give her some cover for the fact that she was late to come out in favor of a local-only wage.

What do the others think?

Among the candidates, Dehn is the only one who has actually cast a vote for a higher minimum wage, something he did as a member of the state House in 2014. “I believe the state should move forward with a liveable wage,” Dehn said. “Short of that, cities have always led on lots of issues like this.”

Dehn said he does not support a tip credit but said the city needs to sit down with businesses to “understand how the increases in wage will impact them.”

Dehn said he thinks a higher minimum wage could lead to less demand for public safety services, something that could allow the city to spend less on the police department. “That money can be used to help those businesses get through what I believe will be a formative development for the city,” he said.

Nekima Levy-Pounds
MinnPost photo by Ibrahim Hirsi
Nekima Levy-Pounds

Levy-Pounds comes at the minimum wage issue as an activist rather than a politician. In her work as a law professor at St. Thomas and as NAACP president, Levy-Pounds has worked on poverty and equity issues and endorsed the work of groups such as $15 Now and Neighborhoods Organizing for Change, which pushed the issue on the city council.

“I’m all for $15 Now,” she said after declaring her candidacy in November. “I’ve spoken at the $15 Now rallies. I’m smiling because I am so excited by the momentum that that particular campaign has built.

“I don’t think $15 an hour is a whole lot of money,” she added. “I personally think that maybe they’re not asking for enough.”

Rahman is the only declared candidate who doesn’t support a city mandate, instead endorsing a voluntary increase that he calls the “On Track to $15” program. Any business that files with the city their intent to increase employee wages to $15 an hour by 2022 would be publicly “recognized and celebrated.”

“Aswar believes that businesses enrolled in the program will be helped towards their worthy goal by increased patronage from socially-minded residents,” notes his campaign website.

Opposition to ballot measure criticized

Even though Frey was an early endorser of a higher city-only wage, he and others on the council have had to respond to the momentum created by activists groups, including Neighborhoods Organizing for Change (NOC), $15 Now and Centro de Trabajadores Unidos en Lucha (CTUL), which organized a campaign to put the measure before voters as a city charter referendum. And he was criticized for seeming to oppose the measure when voting to keep the referendum off the ballot.

Many council members, Frey included, said they were leery of citizen initiatives making city policy, arguing that the give-and-take of the council process is needed to resolve problems and flaws in proposals.

“I believe strongly that while an increase in the minimum wage is necessary,” Frey said at the time, “I simultaneously believe strongly that the referendum is not the mechanism to do it.” 

The same day that the council blocked the charter amendment vote, Frey was a co-leader in drafting an order to have city staff study the possibility of a local-only wage — to meet with “stakeholders,” to research other cities’ laws and to return to the council in the spring with a recommendation for a city ordinance.

State Rep. Ray Dehn
State Rep. Ray Dehn

While there is no guarantee that the council will adopt that recommendation, a nine-vote super majority of council members did state their support for a city-only wage. The number is significant in that it indicated that council had enough votes to override a mayoral veto.

This week, Frey said he supports a phase-in to $15 for franchises and corporations and wants to listen to smaller businesses to craft a strategy for how a wage ordinance would apply to them. “I promised I was going to listen to people and I will,” Frey said.

Frey also said this week that had he introduced an ordinance in 2014 or 2015, “it would have failed miserably.” Hodges’ opposition placed it well behind other worker rights measures, specifically the push to adopt fair scheduling and paid sick leave.

Supporters of the charter amendment were disappointed when the council blocked the public vote, but claimed credit that their campaign put political pressure on the council to reverse its reluctance to push for a city-only wage hike.

Dehn said he isn’t surprised that the politicians are trying to catch up to activists on an issue like the minimum wage. “It’s been the history of progress that oftentimes it is led by the activists,” Dehn said. “As elected officials, we may be a little bit over-cautious on some issues.”

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Comments (10)

This is almost a theoretical

This is almost a theoretical discussion: the State Legislature is well on its way to passing a law that would preclude or prohibit Minnesota cities from passing any workplace ordinances that pertain only to one city. it's easy for any and all of these candidates to espouse some form of Minneapolis minimum wage, which they know would be cancelled by such a state law.

I refer readers to the Star Tribune op-ed by Charlie Weaver, from early January, where he couched his anti-labor advocacy in an essay urging us all to be civil in our discourse. Minneapolis has a brief statement of one of its 2017 goals for lobbying the legislature, which addresses protecting Minneapolis's right to pass its own workplace requirements. Nobody in the city government, or any mayoral candidate as yet, has spoken about what they will do on this issue.

Why isn't anyone asking these candidates about what they plan to do to prevent the legislature from passing a law to prohibit Minneapolis's (and St, Paul's) paid sick leave ordinance, minimum wage ordinance, wage-theft (by employers) law, and decent scheduling ordinance?

Preemption Efforts

It would only take 1 GOP senator (the party that has traditionally stood against 'government overreach' and which probably would love to pass local laws "preserving religious freedom") to derail this attempt in the legislature. On top of that, the Governor would have to sign it.

I think it's far from certain that preemption is going to go through this year, though not impossible.

Local metro leaders don't have a whole lot of leverage over these power centers, but they should be dramatic and forceful in exerting what power they have. I'm not very important in the scheme of things, but I'll happily support his Lt. Governor if he uses his pen for metro progressives, and absolutely will not if he doesn't. I think that making sure the Governor understands how important this is to the metro going into 2018 is one of the biggest things our elected officials in Minneapolis and St. Paul can do.

As for people in government talking about this, I know that CM Glidden was talking about it on her FB page this morning, and that I met with organizers from $15 Now to discuss preemption, local control, and direct democracy earlier today. I'm a candidate for the seat Frey is leaving, and as I try to bring people out to Caucuses on April 4, these issues are what I'll be focusing on.

Decent candidates

But the top two in my opinion are Nekima Levy-Pounds and Raymond Dehn. Dehn seems to have the best idea on minimum wage implementation and I like Nekima as a bold activist who is a strong progressive. Frey and Hodges would be in my second tier with Frey getting the edge (although they both botched the minimum wage issue when there was a chance to push it through).

If the price of gas was $8.50 three blocks

away from all the stations that cost $15.00, where would you go? That is how small businesses will look at where to start up a new store. For anybody who has ever started up a new business they understand how simple this equation is. If foot traffic for your business can make up for the cost of doing business (more costs than just minimum wage) in Mpls you start up, if not you start up 1,000 yards away outside Mpls city limits.

Way too simplistic

I've heard the same arguments about taxes. If taxes are lower 1,000 feet away businesses will go there instead of Minneapolis. Except that they largely didn't. It's an old, tired argument and the proof is in the pudding. Cities that have raised minimum wage recently have been doing just fine - better, in fact. Seattle is but one. That is, of course, if you look at the actual data rather than rely on knee-jerk reactions.

Thomas, businesses take time to adjust.

All of the studies are 1-2 years old. It is the same argument New York State made when it raised taxes, the first few years the impact was small then the flood came of folks and businesses leaving in droves. New York State is now the most active state in giving tax breaks trying to bring business back. Minnesota is on the same track. When there are better restaurants being built right outside the city limits you will see more folks going to them. Years ago Detroit had city taxes and regulations that chased most businesses to just outside Detroit city limits. Look at Detroit 30 years later.

The customer at a lot of

The customer at a lot of businesses is not going to go to St.Louis Park or Roseville for lunch, or dinner, or maybe even to buy gasoline. Geography matters.

Plus, there are actually a number of Minneapolis small business entrepreneurs who already pay their employees at least $15 per hour and believe that consequent low turnover and high employee morale and loyalty more than make up for the extra cost. They respect the people who work for them.

And I make a point of frequenting those small businesses! It's all about the values you have. Save fifty cents, or support working families in your community?

Don't be afraid: we can raise the minimum wage in Minneapolis and the sky will not fall. Really. It's still up there in New York, and California, and other cities around the country who have recently set up higher minimum wages for those folks at the bottom of the scale.

$15

The business who pay $15 (more power to them) have differentiated themselves from the minimum wage jobs that may be an alternative for their workers. It's not that $15 is a magic number, it's the delta over the alternative . So if the minimum wage goes to $15, they need to go to $18 or $20 to maintain that advantage.

It is always surprising how many times these anecdotes are repeated without that assessment.

Left leaning candidate field

We get any more high left leaning field we'll fall over!

Why Not Make it More than $15 per hour?

Why not make it $50 per hour? Or $100? How about more.
While we want people to make as much money as they can, vastly increasing the cost of labor via fiat will cause businesses to charge more and/or have less opportunities. Not all businesses can charge more so then it will be fewer hours and workers needed. It will also be a barrier to those that want to start businesses. I thought Minneapolis needs to increase opportunities for its citizens.