Is a more liberal Minneapolis bad for business?

MinnPost photo by Peter Callaghan
The 2013 city elections ushered in an exclusively DFL/Green mayor and city council dominated by social justice and policy activists.

Three years ago, the voters of Minneapolis elected a mayor and city council who have presided over a tenure with an aggressively liberal policy agenda, whose reforms fall hardest on the backs of business.

Mayor Betsy Hodges unveiled the effort in 2015 under the label Working Families Agenda (WFA). It represented the legislative priorities of a coalition of organized labor and grass-roots reformers, exemplified by first-term councilmembers Alondra Cano and Lisa Bender and three-term Green Party councilmember Cam Gordon.

“There have been some big, really liberal cities pushing the envelope on this,” says Mike Hickey, state director for the National Federation of Independent Business, referring to efforts to boost wages and benefits through new laws. He says that a $15-an-hour minimum wage would have a “real negative impact” on local business owners.

“In Minneapolis we have one of the most liberal activist agendas in the U.S.,” explains Larry Jacobs, professor at the University of Minnesota’s Humphrey School of Public Affairs. “They are seeking to accomplish at the municipal level what isn’t being done at federal level.”

Kevin Reich
Kevin Reich

The 2013 city elections ushered in an exclusively DFL/Green mayor and city council dominated by social justice and policy activists; only a few have any background in business.

And the door is wide open to progressive idealists. “There is greater openness to the activist community than [to] business right now,” says First Ward Councilmember Kevin Reich. But the issue isn’t mere receptiveness. “Some of our council sees business as a negative force, an exploitative thing,” says Fifth Ward Councilmember Blong Yang.

The city’s economy is thriving; the question is whether its leaders recognize business’ role in that prosperity. “I grant you that business creates vitality but is often disregarded,” says Third Ward Councilmember and mayoral candidate Jacob Frey. “A lot of business climate is mentality. Entrepreneurs want to be wanted.”

Distributing prosperity

It’s hard to gauge the impact of measures planned by the City Council because none are yet in effect. The City Council voted in August against using a charter amendment referendum as a vehicle for raising the minimum wage to $15 an hour. Wage activists sued the city and won the first round when a Hennepin County judge ruled that the issue could be put to a vote on the ballot. But that was nixed by the Minnesota Supreme Court, which sided with the city. The council will take up the issue again this year.

Another proposal that rankled business leaders was an effort to require employers to schedule shifts up to 28 days in advance, referred to as “predictive scheduling.” Mayor Hodges withdrew those plans in October 2015 in response to objections raised by businesses with volatile labor patterns, such as restaurants.

The city’s “sick and safe time” compensation ordinance, passed unanimously, will eventually apply to companies with six or more employees, but is not slated to take effect until July 1. The Minnesota Chamber of Commerce sued the city in October in Hennepin County District Court to invalidate the measure and is seeking court injunctions to block it.

Activists gather at a Minneapolis fast food restaurant last September
MinnPost photo by Peter Callaghan
Activists gather at a Minneapolis fast food restaurant last September prior to a march for a higher minimum wage ordinance.

Nonetheless, times are good. An analysis of statistics from the city’s Minneapolis Trends report shows the city adding jobs in recent years. From fourth-quarter 2013 to fourth-quarter 2015, Minneapolis added more than 13,000 jobs, increasing 4.3 percent to a total of 318,909.

Over the period, retail jobs in the city were up 4.7 percent, and accommodation and food services category jobs were up 9.2 percent. While the city does not track restaurant openings, liquor licenses are up 10 percent.

The apartment building boom has been one factor driving the city’s growth. Based on 2013 population estimates, Minneapolis topped 400,000 residents for the first time since the 1970s. The value of construction permits in the city has topped $1 billion for five consecutive years. Before 2012 the value of such permits in Minneapolis was below $1 billion for 11 straight years.

A shift left

The other minimums
  • Federal minimum wage: $7.25 an hour
  • Minnesota minimum wage, large ($500K revenue) employers: $9.50/hour
  • Minnesota minimum wage, small employers: $7.75/hour Starting in 2018, the state minimum wage will be automatically increased at the rate of inflation and other criteria.
  • Living wage: $12.85/hour Minneapolis requires businesses that receive at least $100,000 in city assistance pay a “living wage.” (Based on 110% of the federal poverty rate for a family of four.)

In the midst of prosperity there was a shift in 2013 city elections from a more pragmatic city leadership, exemplified by the previous mayor, R.T. Rybak, to a more ideologically driven government. “I’m a pretty liberal person,” says Johnson, a lifelong Democrat, “but I get painted as a right-winger in this environment.”

The current politics has its roots in the New York City fast-food workers’ strike of 2012. “That fight helped create a narrative under which various states and municipalities have sought to increase minimum wages and raise other worker standards,” says Service Employees International (SEIU) Local 26 spokesman Josh Keller. Local 26 is “part of a faith, community, and labor coalition” pressing on these issues, he says.

For the union it’s good policy and good business. “The SEIU is looking to expand aggressively,” explains the U’s Jacobs, “and is working on public policy it sees as connected. They found no success in D.C.”

In Minneapolis they have found low-income communities of color “on fire” over social justice, says Veronica Mendez-Moore, co-director of the Center of Workers United in Struggle.

“By involving neighborhood organizations in their coalition, [the SEIU] has made it difficult for people like Mayor Hodges to be on the sidelines,” says Jacobs. “Thus the Working Families Agenda.”

“There is definitely more targeted pressure on us on workplace issues,” says Reich. “It’s focused, strident.”

And as far as the WFA was concerned, inflexible. “I get why business thinks Minneapolis is not friendly,” says Yang. “The Working Families Agenda was presented to us as non-negotiable.”

Which makes for a one-sided debate. “The resource that business has an unequal share of is money,” says Jacobs. “Organizers have networks of people. On a municipal level, that is more effective, and business is not set up to work from that tool kit. Business is at a structural disadvantage in the city.”

Committee Chair Blong Yang
MinnPost photo by Terry Gydesen
Committee Chair Blong Yang

“My ward is mom-and-pop businesses,” says Johnson, who represents the city’s far north side. “They’re busy running their business. They can’t spend days hanging around City Hall.”

Some of business’s reticence to speak goes deeper than time constraints. “In the current environment, individual business people are scared of being labeled racist and boycotted, so they shut up,” says Yang. “It’s a bad cocktail for good policymaking.”

The current political climate is so ideologically polarized that even mainline liberals on the council find themselves under harsh critique. “It’s all or nothing and it permeates a lot of things,” says Johnson. “People are not listening to each other.”

Court battle looms

This year is shaping up as a challenging one for business and the few councilmembers trying to maintain an inclusive posture toward it. The Minnesota Chamber is hoping for favorable outcomes on its lawsuit and help at the Minnesota Legislature on legislation to preempt future municipal wage and benefit laws.

The City of Minneapolis is the largest economic engine in the state. The chamber’s lawsuit marks the first time that the group has ever sued the city. Litigation was a “last resort,” says Cam Winton, director of energy and labor-management policy for the Minnesota Chamber (Winton ran for mayor in 2013). He says that the chamber’s efforts to raise concerns through the city’s Workplace Regulations Partnership Group and other venues went nowhere.

Cam Winton
MinnPost photo by Karen BorosCam Winton

“Our input fell on deaf ears . . . . It became clear to us that the workgroup was a kangaroo court,” says Winton. “The Minnesota Chamber saw no choice but to use the legal process.”

Winton does not have metrics to illustrate the impact of similar policies on businesses in other cities. “I don’t have hard data,” he acknowledges, but adds, “I think fewer businesses will start in Minneapolis and St. Paul.”

The chamber is joined in the lawsuit by five co-plaintiffs: the Minnesota Recruiting and Staffing Association, the National Federation of Independent Business, the TwinWest Chamber of Commerce, Graco Inc. and Otogawa-Anschel General Contractors and Consultants LLC.

The chamber’s core argument is that the Minneapolis sick leave ordinance conflicts with state law. The suit also makes the case that the state has extensive employment laws on the books and that efforts like the Minneapolis policy would create a confusing and complicated patchwork of local rules throughout the state. (The chamber did not offer a reason why it is not suing the City of St. Paul, which has adopted a similar policy.)

In its response, city attorneys frame the “sick and safe time” ordinance as a public health issue. But ultimately the city argues that state law does not ban or conflict with the city’s power to pass such a law. Handicapping the lawsuit’s prospects is not clear-cut, according to attorneys who specialize in workplace issues.

“Certainly state law is not absolutely clear,” says Kristin Berger Parker, a partner with Stinson Leonard Street.

The chamber is joined in the lawsuit by a large company that has an 90-year history in the city of Minneapolis: pump and spray equipment maker Graco Inc., which generates $1.3 billion in annual revenue.

“We feel that this is a slippery slope . . . if this stands, we have no idea what the next mandate will be,” says Charlotte Boyd, a Graco spokeswoman.

Would Graco move jobs out of Minneapolis in response? The company isn’t saying, but is also not emphatically dismissing the possibility. “The legal action is intended to secure our future and the future of other businesses in Minneapolis,” says Boyd. “Like any business, pending the outcome [of the lawsuit], we’re always evaluating all of our business options.”

The 3,580-employee company has 790 employees at its headquarters along the Mississippi River in northeast Minneapolis. The company also has 190 employees in Anoka and another 650 workers at two facilities in Rogers.

Business leaders point out that the new ordinance is problematic for companies with multiple locations or a mobile workforce because in some cases it reaches beyond the city limits. The new law would apply to any employee who works at least 80 hours a year in Minneapolis, even if the employee is based in another city. Boyd says that would create an administrative headache. ”We need the flexibility to be able to move our employees between locations,” says Boyd. “If one division is slow, instead of cutting back on hours . . . we can move them to a different city. It helps our employees with job security.”

Graco does not offer employees sick pay. Boyd says the company replaced its paid sick leave in 1997 with a 2.3 percent increase in worker’s pay, which is meant to cover the cost of sick time. “Our employees understand that they’re getting paid for that.”

If the city’s policy survives the legal challenge, Boyd says it’s not yet clear how the company would modify its policies and procedures to be in compliance. “We would really have to overhaul how our employees are paid for sick time,” says Boyd. “We haven’t made a decision on what exactly we’re going to do.”

Plymouth-based Select Comfort Corp. plans to move its headquarters and more than 900 employees to downtown Minneapolis this fall. The Sleep Number bed manufacturer and retailer posted sales of more than $1.2 billion in 2015.

“Our decision to move downtown was not significantly influenced by any recent action by the City Council,” says Select Comfort spokeswoman Susan Eich. “That said, like many Minnesota employers, we have concerns about one-size-fits-all mandates that reduce flexibility for employers to manage their businesses.”

Many white-collar employers already offer sufficiently generous wages and benefits to render city mandates moot. Manufacturing jobs, for example, account for only 4 percent of all jobs within the city of Minneapolis. While state labor statistics don’t track or define “white collar” jobs, four sectors—information, finance and insurance, professional and technical services, and management of companies and enterprises—total 29 percent of jobs in the city.

A legislative end-run?

The Minnesota Chamber and other business groups will back efforts in 2017 to pass so-called preemption legislation at the state Legislature. It would explicitly prevent cities from passing laws such as the Minneapolis sick time ordinance. Efforts to do so in recent sessions have failed.

“We do not have a law in Minnesota that explicitly prohibits cities from passing this type of law,” says Dan Prokott, a partner with Faegre Baker Daniels. “And the fact that the legislature has tried to pass bills that would explicitly preempt these types of laws indicates at the very least there is a lack of clarity in the current law.”

Opponents see preemption as a likely prospect. “There is a good chance the Legislature will pass a preemption bill this session. It is a high priority of the business lobbies. It had traction even in the special session negotiations this fall. But I can’t see the governor signing it,” says Chris Conry, economy program manager for the St. Paul-based TakeAction Minnesota, an advocacy organization which supports wage and sick time measures. One of his top priorities at the 2017 session, he says, is stopping preemption.

The fight for $15

Not alone

Minneapolis is not an island. The battle for higher minimum wages is being fought in cities across the U.S. Several have already adopted laws to ultimately boost the minimum wage to $15 an hour.

  • New York City: Minimum wages are set to increase to $15 an hour for companies with 11 or more employees by 2018; for smaller companies, it’s 2019.
  • Seattle: The wage will be increased to $15 an hour in stages.
  • San Francisco: Voters approved a ballot initiative. The minimum wage is slated to hit $15 an hour in 2018.
  • Los Angeles: The City Council voted to increase the minimum wage to $15 an hour by 2020.
  • Washington, D.C.: The City Council voted to increase the city’s minimum wage to $15 an hour by 2020.

In November, voters in Arizona, Colorado, Maine and Washington approved ballot measures to boost their minimum wage. Most will boost in stages to $12 an hour in 2020; Washington will raise its minimum wage to $13.50 under the same timetable.

The activist community’s primary push this year will be on the $15 minimum wage.

“Minimum wage will come up,” says Frey. “It would be best without electoral politics. We need real engagement from all sides, but I fear a scenario where all-or-nothing approaches dominate.”

The political dilemma for the mayor and council is that most expect electoral challenges from the left in November. “The challenges are about $15 and other aspects of the working family,” says Jacobs. “[The activist community] didn’t get [what they wanted quickly enough] and they are exacting their pound of flesh.”

The mayor was one of the first to face opposition, when former NAACP President Nekima-Levy Pounds announced her candidacy in November. Observers expect the council challenges in North Minneapolis to be focused on a racial equity agenda, while in the south of the city aspects of the WFA or even issues of density and bike lanes will be prominent. “These are young, idealistic people without a lot of life experience,” says Johnson; they are more than happy to take on other like-minded, but more reflective, policymakers.

The fear among business interests is that business-sensitive councilmembers will tilt left in the face of absolutist challenges. “There is no nuance to their perspective,” says 13th Ward Councilmember Linea Palmisano, who represents the city’s moderate southwest corner and expects a challenge from the left. “You’re simply not progressive enough.”

But many turn to the city for these measures as a last resort. “When there’s no hope the state or national government will act,” says Palmisano, “it is going to come up in the city.”

Mendez-Moore says she expects fair scheduling legislation, thought dead after the 2015 attempt, to come back on the council’s agenda as well. But the main priority appears to be minimum wage.

Currently Minnesota has the ninth highest minimum wage, according to bankrate.com. The stat is a moving target, with changes in many states in process. Still, if Minneapolis were to adopt a $15 minimum wage, it would join parts of Seattle and San Francisco with the distinction of the nation’s highest. (See chart.)

Most of the council is theoretically supportive, but with many caveats. “I am going to wait and see on $15,” says Johnson. “I support people making more money, but there will have to be necessary exceptions and we have to understand the full impact. Many of these businesses operate on a shoestring.

That point aside, the question most of the City Council members who spoke to TCB grapple with is the impact of the city being an island of $15 in a region where the minimum is $9.50. (Mayor Hodges did not accommodate requests for an interview.)

“Minneapolis has a very different economy than the rest of the state, that is true,” says Frey, “but the region is an economic organism.”

The council commissioned a study on the $15 minimum wage led by the Roy Wilkins Center for Human Relations and Social Justice at the University of Minnesota, with research support from the AFL-CIO, the union-supported Economic Policy Institute, and Rutgers and St. Cloud State universities. The report said the change portended few negative impacts, but its analysis was criticized for a lack of rigor and bias.

“The data in the study didn’t prove anything,” says Blong Yang. “It was not compelling. It didn’t account for mobility. It did not seem comprehensive.” Yang calls $15 “a gift to every first-ring suburb and St. Paul,” and is inclined to vote against it.

He and other members ask how the city will balance the disparate impacts of the wage for the many city residents who work outside its borders.

Winners and losers

“We are going to raise the cost of living,” says Palmisano. “How many of our people have jobs at MOA and will be affected by it but not benefit by a wage increase? The study did not address those things. It can’t be the final word.”

Small-business groups are concerned as well. “It’s going to be impossible for teenagers to get jobs. Some businesses are going to move,” says Hickey of the National Federation of Independent Business, which has joined the state chamber in its lawsuit against the city’s sick leave policy.

He points to operators of small restaurants and says, “I think it would be crushing to them.”

Yang questions whether his ward, arguably the city’s most economically disadvantaged, will end up a victim of a localized minimum wage: “Ward 5 is always the first to suffer and the last to benefit.” Yang’s fear is that an inconsistent wage base will create a host of unintended consequences. “In North Minneapolis our businesses will have the freedom to move to Robbinsdale, Golden Valley, Brooklyn Center,” he contends. “Cub and McDonald’s will figure it out. They will hire from the suburbs, and find better-trained and -educated workers seeking the higher city wages, and my folks will be displaced. They will be forced to take lower-wage jobs [in the suburbs] with extra transportation costs.”

Whose Main Street?

The local chapter of the small business-driven Main Street Alliance has made the rounds at City Hall supporting the WFA. Its local members have frequently been quoted as examples of businesses not only eager to spend more on their employees, but to profit less. They have been one of the few prominent Minneapolis business voices in the WFA debate.

Twin Cities Business“Does the Main Street Business Alliance represent most businesses?” asks Yang. “I doubt it, but where are the other businesses? I’m not seeing a diversity of business talking to us.”

Hickey wishes there was a diversity of ideologies to leverage more of a voice for business on the council. “There’s no checks and balances here. There’s just different shades of liberalism,” says Hickey. “That’s part of the problem: It’s a one-party city. A lot’s riding on this court case. If we win, it’ll shut all this down.”

But if they lose, Yang and many of the council members TCB spoke to will point to a dearth of feedback from business, and a need for local, real-world input in shaping city ordinances that affect them. “Small business has to find someone,” Yang says, “to speak for them.”

Beyond the lawsuit, the question is whether the mayor and broader council are receptive to a more nuanced and holistic understanding of the role of business climate in building broad prosperity. “Business is merely a means of creating economic exchange,” says Kevin Reich. “You can’t point too many fingers at business, because fundamentally, business is us.”

Editor’s note: This story, which runs in our January 2017 issue, delves into Minneapolis’ business climate and the impacts of the city council’s attempts to raise wages and alter workplace policy. In a subsequent article, TCB talked with one business owner who fears he might have to relocate if the city’s minimum wage rises. That story can be read here.

This article is reprinted in partnership with Twin Cities Business.

Comments (52)

  1. Submitted by Frank Phelan on 01/24/2017 - 11:07 am.

    Some Thoughts

    If some business owners in Minneapolis find the political environment to lack nuance, they’d really hate the climate in states like Wisconsin, Kansas, and others. Go to those places, and all you’ll find is the Koch brothers and De Vos family driven ALEC agenda getting rammed through on a fast track.

    It’s very odd to find that conservatives are looking to take authority away from local government when for decades they have sung its praises. One may wonder if it was really based on principle or expediency.

    Finally, if the business community really wants some dialogue and some give and take on these issues, they could go to the legislature and propose some ground rules for all of the state’s employers. In stead, they seek to stifle debate by preempting all local laws without proposing state wide alternatives. For too many, standards can never be low enough, whether it be pay, benefits, or safety. We need to start taking concrete action to reverse the redistribution of wealth. It’s been going up the ladder for decades now, and more tax cuts for the wealthy have only made it worse.

    If employers agreed to the old rules that actually allowed employees to join unions, we would not need this cookie cutter approach. Individual workforces could negotiate their own deal, choosing more or less generous sick time as they and their employer choose. But don’t hold your breath waiting for this.

    If they are truly interested in compromise and consensus, they can work on solutions for the entire state. Again, don’t hold your breath on that. That fact is, a democratic governor is the only thing keeping Minnesota from becoming another Wisconsin.

  2. Submitted by Connie Sullivan on 01/24/2017 - 10:39 am.

    One never denies that business is important to the health and dynamism of an economy. But what’s lost in this and other discussions of efforts to improve workers’ conditions is the very situation that causes the activism that this article bemoans: abuses of low-paid workers by business.

    The problems that activists are attempting to address are those that business has adamantly refused to address for hourly wage earners at the lowest end of the wage scale: unlivable hourly wage levels, employer theft of workers’ wages, outrageously inhumane scheduling practices by employers, and total lack of paid sick leave. Voluntary efforts to correct these abuses have not worked (fact).

    How awful! that business is being outnumbered by activists who have a vote in Minneapolis and threaten the seats of more conservative Minneapolis Council Members who really believe that workers should continue to be subject to unfair and dysfunctional workplace practices if that’s what businesses want. Can’t have businesses moving, right?

    This article portrays pro-worker activists as some kind of rabid ultra-left crowd, and Minneapolis as some kind of hotbed of an un-Minnesotan kind of inconsiderate treatment of business. No. Business is organized, and in Minnesota business has been used to getting its way, to having its voice being the dominant one. Thank you, to the now-organized local activists who are putting up a good fight for the workers.

    And Minnesota business, instead of working with activists to address serious problems for our workers (there are lots of national models for phase-ins and other flexibility in minimum-wage improvement plans, etc.), are attempting to stop any and all pro=-worker activism by outlawing it at the Legislature. Where the business lobby is usually catered to, and especially by the GOP.

  3. Submitted by Henk Tobias on 01/24/2017 - 11:34 am.

    If Conservative policies are good for business.

    Why are our out state areas hurting so much financially? They should be booming.

  4. Submitted by Harris Goldstein on 01/24/2017 - 11:35 am.

    An important topic that deserves discussion

    But this very one-sided article should be more clearly labeled – at the byline – as an opinion piece.

  5. Submitted by Joel Stegner on 01/24/2017 - 12:44 pm.

    Full time work with decent pay

    Forget about part-time teen workers for a minute. If you want to pay them less than an adult minimum wage because they are generally not supporting a family, don’t. We are talking about single and coupled adults who reasonably want to work in full-time jobs to support themselves and their families. This holds for all regions of the state. Our economic system is not serving us well if people cannot find jobs to support their household, but have to rely heavily on government subsidies and charity working full time. For a full time worker, a $5 dollar an hour increae works out to $10,000 per year. If businesses cannot afford that kind of increase, spread it over multple years, but way too many people cannot get full time work with liiving wages. For those who are in the upper income group, life has favored them. Most public services richly benefit them – police and fire, public infrastructuring from roads to sewers and electic grids abd a highly educated labor force they pay nothing to prepare for work. Find a way to pay your workers more and lessen the cost of government filling in the gap. If you don’t public investment in things that promote your business will fall short, imposing new costs that undermine your return on investment.

  6. Submitted by joel gingery on 01/24/2017 - 12:48 pm.

    Complex situations

    It’s evident that no one knows what wiill happen to the Minneapolis system if these changes are made final. Ideally…ideally what kind of a city do residents/business owners want? Two considerations: In complex systems such as Minneapolis one cannot plan or predict how to achieve your goal; it must be trial and error. So the process is small pilot trials/balloons launched and see what happens, then either continue or start over based on results achieved. Constant monitoring, innovation if necessary (and it will be) because most people will have to change the way they think things actually work. And all stakeholders should be invoved in creating the vision (and constantly revising it) and the decision making process on how to proceed. See Cynefin framework.

  7. Submitted by joe smith on 01/24/2017 - 01:57 pm.

    Pass it and find out.

    I look at NewYork State which taxed and regulated businesses plus residents out of the state 35 years ago. All the liberals said their policies wouldn’t hurt New York, it took a few years but they lost residents and businesses galore. They are now promoting “tax free” zones and financial deals to bring business back to the state….. Probably easier to keep them years ago…

    Pass the laws and see for yourself… I have my thoughts and many here have their ideas, one way to find out… Unfortunately the Mpls people will have to live with it if progressive theories don’t work.

    • Submitted by RB Holbrook on 01/24/2017 - 04:26 pm.

      Except that . . .

      New York has the fifth highest per capita personal income in the country. The unemployment rate is 4.9%, slightly more than the national rate of 4.7%.

      If by “New York” you mean just the five boroughs, the population of the city has increased by almost 1.5 million people since 1980. The whole state has added around 2.3 million since the state started losing residents and businesses galore.

  8. Submitted by Michael Hess on 01/24/2017 - 03:35 pm.

    Appreciated

    If you listen only to the main media coverage, the Mayor and the more vocal city council members you would think that every day half the population of Minneapolis is occupying City hall to demand the $15 minimum wage, sick time, scheduling restrictions, and whatever comes next, and that the city government is 100% in on this agenda.

    I appreciated hearing from some of the other City Council members in this article that they understand the complexity of the issue, that yes they realize making it more expensive to live in Minneapolis could hurt a low-wage resident who works elsewhere, or drive out businesses without the profit margin to absorb such cost increases, or make the city less attractive to the many small operations who don’t have the wiggle room to substantially hike their wages or pick up a lot of record-keeping paperwork for these new regulations.

    The old canard returns – that big problem is business owners who refuse to share their success with the workers (who have decided to raise a family on an entry level job which requires no education) keeps returning but gains no credibity. Note that some large employers are throwing their weight behind educational programs to help their employees who are motivated to move up in their management ranks. The $15 now and others should be very excited by the efforts to help people work their way up the employment ladder since it gets them a higher wage.

    If Minneapolis becomes an island of $15 minimum wage, heavy-handed government mandated scheduling and benefits I fear that it will hurt the business owners, the workers the progressive activitsts think they are helping, and the residents who will see the types of businesses they value in their neighborhood either jack prices to the point they aren’t accessible, or decamp to more friendly first ring suburbs and cities.

    • Submitted by Matt Haas on 01/24/2017 - 09:36 pm.

      Boilerplate MBA hooey

      Here’s one for you. You want your meritocracy? Prove it, ACTUALLY make opportunities equal by working to make education available for all who wish to attain it, not just those blessed with the finanicial wherewithal to do it themselves or those who luck into employment that offers it. Until then, all you do is condescend to those who it seems you feel are somehow lesser beings than yourself.

  9. Submitted by Wade Brezina on 01/24/2017 - 03:38 pm.

    What can we do to make things better?

    I have only lived in Minneapolis for a couple of years. I love it! I love being in one of the most Liberal places in the US. My neighbors are wonderful and we live in a live and let live world on an individual level. The history of what made this such a wonderful place is rooted in Liberal ideas of empowering people and realizing that the resources of the community need to be re-invested in the community.

    That said I am concerned that the activists have lost site of what makes us wonderful. I have no doubt that there are a few bad players out there who abuse workers with scheduling. However, the proposed fix was as looney as Trump! It was as looney as and equivalent to Supply Side Economics, which unfortunately the GOP still seems to believe in. If anyone could actually create a regulation that would stop bad actors from abusing scheduling without allowing people to be able to meet the actual demand from their customers I would like to see it. It is only in some kind of crazy Trump like world where you can believe that someone can predict how busy they will be on any given shift a month in advance. We need to move away from such crazy thinking not embrace it because we want something better for the less fortunate and don’t care about reality.

    Wade

    • Submitted by Matt Haas on 01/24/2017 - 09:30 pm.

      Hence the problem

      With capitalism, there is every incentive to cheat. I suppose your next thought would be “why don’t we just punish the bad actors” right? Well, because punishing the bad actors punishes their victims as well. In addition instead of inspiring innovation to cope with the realities of predictable scheduling, sick leave, and living wages by all businesses, it promotes innovation in those “bad actor” outfits in the area of skirting enforcement and further shackling the workforce (in order to extract as much as can be gained before the hammer drops). The “good” guys have no incentive to improve, and the lot of workers never changes. Proactive measures are all that will work.

    • Submitted by Karen Sandness on 01/31/2017 - 08:32 pm.

      Inhumane scheduling

      of the sort known colloquially as “clopening” (working the latest shift one day and the earliest shift the next) is relatively new. So is not telling workers their schedules till the day before or even the morning of.

      When I worked retail in the early 1980s, we knew our schedules a week in advance.

      If we showed up for a shift, we stayed till it was over. I don’t ever remember anyone being sent home because of lack of customers. If there were not enough customers to keep us busy, we were supposed to arrange the racks and shelves (to avoid that “picked over” look) and check the dressing rooms to make sure they were clean and not full of rejected merchandise.

      I have to say that some of today’s major retailers could use that attitude. I’ve walked into one of our formerly prestigious department stores only to find all the clothes in one category in a chaotic jumble of styles and sizes and have had to wander from department to department to find someone to ring up my purchase.

      On occasion, we were lent out to another department that was shorthanded.

      What one commentator referred to as “MBA hooey” has taken over the business world. Employees are seen not as assets but as regrettable liabilities who are grudgingly paid as little as possible for doing the real work of the business or institution (including colleges and hospitals) so that the executives and shareholders can be rewarded to royal standards.

  10. Submitted by Bill McKinney on 01/25/2017 - 01:58 pm.

    Another angle

    I would like to see higher wages especially at the bottom. I also believe that raising the minimum wage would be a great idea if implemented at a regional level. My main concern is the complexity this creates for businesses trying to operate in the city. The fact that the City leaders were crowing about the wonderful new investment they’d made by hiring people whose full-time jobbis helping business owners navigate the already Byzantine City regulatory gauntlet is astonishing to me. What an astonishing failure to create a city that works!

    I would rather see the City make it easier and more attractive to businesses to locate in the city and bring more jobs in. Our regional unemployment rate is very low, and if we welcome more jobs to the city it would push wages up. If low wage businesses can’t find workers because they’re working other places they’ll pay more or suffer the consequences. I think the City offers amazing amenities which is why companies like Select Comfort are moving down here. If we were to focus in on making it EASIER to open and grow job producing businesses here the wage problem would solve itself I think.

  11. Submitted by Connie Sullivan on 01/25/2017 - 04:46 pm.

    We’re not talking something that has not been tried, and even tried locally: There are small businesses in Minneapolis who have embarrassed big, bad-paying corporations like Target–a major sinner in the wage area for hourly workers–by implementing reforms like higher hourly wages, paid sick leave, decent scheduling practices, and even benefits beyond wages. I’m talking cafes and restaurants, with low margins.

    You know what their experience has been? They saved money because turnover among workers went way down (lower hiring and training costs), worker loyalty and productivity went way up, as did morale all through the business! Prices went up a bit and customers didn’t stop coming.Everybody wins, and everybody feels good about the business. This fairness and decency to workers is part of what makes Minneapolis liberal–not the lattes, the yoga studios and the nightclubs!

    Those of us who are familiar with labor history in Minneapolis ad St. Paul, throughout the 20th century, have heard all these business tales of woe before: the sky is falling! the sky is falling! if workers get any better conditions. Actually, no.

    And: the Wilfs did big Minneapolis business a real and lasting disfavor when they threatened to move the Vikings unless the still-viable Dome was demolished and replaced by a posh football palace for them. Minneapolis voters are really tired of the old refrain: “If I don’t get my way I’m taking my ball and bat and moving to the suburbs or to L.A.”

  12. Submitted by Dennis Wagner on 01/25/2017 - 07:47 pm.

    Curious

    What ever happened to unions? Shouldn’t these folks be getting together and forming a union and fighting for thee goals? Seems the that business felt fine trashing Unions out, but sooner or letter the common man still needs to make a living.

    • Submitted by Frank Phelan on 01/25/2017 - 08:59 pm.

      Tools In The Toolbox

      Most of the best tools unions had for organizing were made illegal by the Taft-Hartly Act in 1948. A lot of people trace it back to Reagan. But if you look at the unionized share of the private sector workforce, it began it’s long slow decline shortly after 1948.

      The act allowed for states to become right to work for less, which enlarged government by inserting it into legal agreements between private parties. It curtailed free speech by limiting common situs picketing. Where unionized contractors had once agreed to only purchase union made lighting fixtures, that was made illegal. More government interference.

      Taft-Hartly was a death blow to liberty in America and a huge expansion of government into the economy.

      • Submitted by Dennis Wagner on 01/26/2017 - 09:23 am.

        Thanks Frank

        Did I read correctly, Business wants government in labor negotiations?

      • Submitted by Paul Udstrand on 01/26/2017 - 11:15 am.

        Yeah, I think your labor history is little skectchy

        It’s not government interference per se, but interference on behalf of industry that’s been part of the decline in union participation rates. Those rates started a continuous drop in the mid 50’s not 1948, between 48 and 53 participation rates actually increased. Government can “interfere” either on the behalf or workers, or companies, or it can be neutral, which usually benefits employers more than labor for a variety of reason.

        The fact is we have the weakest the labor laws and enforcement in the developed world. It’s far more difficult to organize and join a labor union in the US than elsewhere and workers receive far less wages and other benefits accordingly. Whether you call that government interference or neglect is matter of debate.

  13. Submitted by Paul Udstrand on 01/26/2017 - 11:02 am.

    Typical business journalism- typical flaws

    We start out with the declaration that city policy is falling the “hardest” on the backs of business, O.K. well who’s back do YOU think city policy should fall hardest on instead? After decades of policy falling hard on the backs of minimum wage employees, median wage and low income home owners, and hundreds of homeless working people, why is it such an outrage that business is being asked to shoulder a little more burden?

    I know the business community applauded Rybak’s obsession with stadiums and arena’s, as well as other “business friendly” initiatives but there’s nothing in the least bit “pragmatic” about those policies. While the new Vikings stadium, the arena, and the new “park” may be a combination of fiasco and financial sink hole for the city, but they’re not pragmatic. Why is it “pragmatic” to let employers pay wages so low that taxpayers have to make up the difference with food stamps and subsidized housing? Why is it “pragmatic” to have ill food workers preparing our food instead of being able to stay home until it’s safe to prepare and serve food to the public? Why is it “pragmatic” to funnel 90% of the economic growth into a few business owners accounts rather than share it more equitably with the workers that make that growth possible? Why is it “pragmatic” to assume that a business owners rather than the labor that makes the business possible is responsible for economic growth? None of these assumptions are even legitimate much less pragmatic, yet this is always the starting point for business journalistism.

    Then we get the declarations of all the “harm” that “liberal” policies are inflicting on poor business owners, without a single shred of real information. Business owners and chambers of business always throw these claims around but business journalists never ask the most obvious questions, i.e. “What is your revenue, and what is your actual profit margin?” Margins are low and this will put them out of business we’re told but without that financial information those claims are meaningless and unsubstantiated. Business owners have a well documented history of exaggerating financial hardship when it comes to labor disputes so a responsible person doesn’t accept such claims at face value. The most likely scenario is simply that business owners don’t want to share more profit with their workers, not that they can’t actually afford higher wages, sick time, and better working conditions. At any rate, show us your numbers or go home.

    The other false assumption typically behind these hardship claims is that business owners are trapped in a closed zero sum system that can only draw higher expenses out of fixed revenues. The fact is that profit is the difference between revenue and expenses, and every business owner is trying to increase revenue as well as control expenses. Every business has the option of raising prices in order to pay for expenses… it’s a little thing we call: “inflation” and it’s a standard feature of healthy economies, not a death knell for commerce. It’s always interesting when business boys go on and on about “growth” but pretend they live in closed financial system with zero growth when it comes to labor expenses. So adding 50 cents to every menu item is a horror beyond imagination putting an owner within reach of bankruptcy… unless that 50 cents is going to the owner instead of his workers, in which case it’s “growth”.

    Then we get the complaints that government isn’t listening to business, “deaf ears” they say. The problem with that claim is that government typically doesn’t raise taxes or minimum wages effectively for decades if at all. Furthermore government subsidizes business in a myriad of ways with everything from TIF programs to welfare programs that pay for low wages, and outright subsidies, loans, and grants. The problem isn’t that MPLS isn’t listening, the problem is that business doesn’t have a veto power it’s accustomed to for a change.

    I remind everyone, MPLS actually already has a “living wage” ordinance. The problem is pragmatic guys like Rybak gave out exemptions like candy. Target for instance received a variance when they built their headquarters downtown. So you have a multi-billion dollar company with employees who qualify for food stamps downtown. Oh the horror! Sure, but horror but whom? Not Target.

    For decades American business owners, executives, and investors have vacuumed up the vast majority of economic growth, growth only made possible by efficient and inexpensive labor and lax enforcement. This isn’t a “natural order” it’s imposed oligarchy. For decades American business have taken advantage of the weakest labor laws and lowest minimum wages in the developed world, that can’t last forever. Business won it’s war against organized labor for now, but one way or another workers will get their due, if they can’t organize and negotiate, they vote and legislate, but it’s going to happen, either unions will make a comeback or lawmakers will fill the void.

    As for economics, experience has shown us that business people and chambers of commerce are the worse economists in the nation if not the world. I’ll start taking these people seriously when they explain why they think recessions are good for business. There isn’t a recession triggering policy from de-regulation to magic tax cuts and spending cuts that these folks don’t support as a matter of pure faith. They demand “smaller” government whenever they get a chance but are baffled by the collapsing infrastructure that blunts their ability to compete in the global economy.

    Wealth disparity isn’t just simply wrong for a variety reasons, it’s economically unsustainable. When you have this kind of disparity in an deregulated environment you get unstable economies prone to frequent and sometimes catastrophic collapses. We KNOW this from experience yet all the business boys can think about is lower their costs at the expense of their employees.

    The business “community” shouldn’t be shut-out of policy discussions, but nor should they control policy. Good policy falls the strongest backs, not the weakest backs, that’s not an outrage, it’s democracy.

    • Submitted by John Appelen on 01/26/2017 - 06:08 pm.

      Personally I think Minneapolis should just keep increasing the cost of doing business in Minneapolis. It would be an interesting experiment to see if the folks who live there would:

      – if they would willingly pay higher prices to support those local jobs, higher wages, local taxes and those additional employee benefits?
      – or start shopping further out to save money?

      Based on the number of people who shop online to avoid the “brick and mortar”, personnel, tax, etc costs, my guess is it would be great for the businesses in the nearby suburbs and Amazon in Shakopee !!! 🙂

      • Submitted by Paul Udstrand on 01/27/2017 - 08:59 am.

        Again…

        It’s called:”inflation” and it’s a normal and healthy economic phenomena that people have been living with for hundreds of years in capitalist economies. Inflation becomes an economic problem when wages and salaries fail to keep up with it, as they’ve done so for the last few decades for minimum wage workers. So yes, people will and do pay higher prices over time, it’s a standard feature of healthy economies. Auto companies would have long ago gone out of business if they couldn’t sell a car for more than the price they got in 1975, and no bailout of any kind could save them.

        Consumer preferences for online shopping have nothing to do with retail wages, the migration to online shopping would have happened regardless, poverty wages won’t save brick and mortar, they’ll just keep employees living in poverty until the brick and mortar closes.

        Look, if a company is located in MPLS it’s there for a reason, and that reason simply cannot be cheaper labor, labor in MPLS isn’t actually cheaper than labor in Minnetonka. In fact, the higher costs of living in the suburbs and exo-burbs may actually make labor there more expensive. I wouldn’t be surprised for instance to find that fast food and retail employees in Shakopee actually get a little more than those in the cities. I know the “help” wanted signs in the suburban Targets say they have starting wages around $12 an hour, while the starting wages downtown are less than $10 because of the living wage variance they got from the city. Then you have suburban rents and traffic patterns etc. It’s not clear at all that it would actually be cheaper to do business in the burbs regardless of $15 hr wages. Business people I know personally who’ve move from MPLS to St. Louis Park always complain about the Parks more stringent regulations, building and zoning code requirements, etc.

        • Submitted by John Appelen on 01/27/2017 - 01:32 pm.

          Really

          If wages and costs rise at the same rate… What is the net benefit?

          If costs, wages, etc had stayed the same, of course the car cost could be the same.

          Simple: if know one pays for the local store and the employees… The jobs go away… Maybe all those folks can get a job in Shakopee.

          As I said, let’s try it and see what happens.

          • Submitted by Paul Udstrand on 01/28/2017 - 03:09 pm.

            Simple stuff really

            “If wages and costs rise at the same rate… What is the net benefit?”

            Depends on revenue. If revenue is greater than costs, and “wages” are a: “cost” by the way, you got yourself a profit.. that’s called a net gain or benefit.

            “If costs, wages, etc had stayed the same, of course the car cost could be the same.”

            Yep, THAT’S called: “stagflation”, we had it in the late 70’s and early 80’s. Most economists think stagflation is not a good thing.

            Basic stuff.

            • Submitted by John Appelen on 01/28/2017 - 09:55 pm.

              Better

              Here is a better explanation from the fed reserve web site.

              “The Federal Open Market Committee (FOMC) judges that inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve’s mandate for price stability and maximum employment. Over time, a higher inflation rate would reduce the public’s ability to make accurate longer-term economic and financial decisions. On the other hand, a lower inflation rate would be associated with an elevated probability of falling into deflation, which means prices and perhaps wages, on average, are falling–a phenomenon associated with very weak economic conditions. Having at least a small level of inflation makes it less likely that the economy will experience harmful deflation if economic conditions weaken. The FOMC implements monetary policy to help maintain an inflation rate of 2 percent over the medium term.”

              Please note that 2% is the goal and we have been hovering around that quite well. No desire for big changes.

              • Submitted by Paul Udstrand on 01/29/2017 - 09:12 am.

                Inflation…

                Accounts for wages increases but wage increases don’t drive the over-all inflation rate. Several studies have shown that $15 minimum wage would have little or no long term impact on the over-all inflation rate that you’re referring to here.

                • Submitted by John Appelen on 01/29/2017 - 12:25 pm.

                  Well someone is going to pay the higher wages and I am pretty sure we know who… The consumers.

                  You are correct that labor is just part of the cost, but for many industries it is a significant part. It is a complicated issue.

                  I prefer to drive up wages by removing illegal workers from the job market. And subsidizing low wage earners via work tax credits. That way the costs are paid for by the wealthier tax payers, not everyone. (ie min wage = regressive tax, income tax = progressive tax)

    • Submitted by Dennis Wagner on 01/26/2017 - 10:05 pm.

      Good discussion

      Paul, nice piece, in response o a nice article: hopefully you are ok with some comments? , Hardest? Without some financial support, relative to the city that is a hard one to choke down, however in the “hood” my perspective is slumlords prey off the neighborhoods, not saying all rentals are slumlord! Stadiums, took my X-councilman (that ran for mayor) to the wood shed on this one but would vote for him again. Sometimes we pay for the quality of life, but I am more than happy with the vitality of downtown, north loop and NE, especially the Brew Pubs. Not sure where to go with the workers other than they need to get some fire in their belly, saw “Hidden Figures” the other night, those ladies had fire in their bellies, and form a union. If the business folks had some cojones they would take a 101 from Sun Tzu and take the country without a war and start working on a solution before this becomes a labor war! We have a great Civil Rights Dept at the city, perhaps both sides should use it to help negotiate a mutually beneficial agreement, called” Win-Win” Stephen Covey 7 Habits 101!
      Tough to align one way or the other on the business folks without seeing their P&L’s to me that is pragmatic. But a good point is made, if folks can’t support themselves W/O government assistance, we have an issue, however one of the caveats: is it a life style issue or a financial issue? Got friends at 6-digit income having troubles supporting themselves/families! Where does the rational thinning fit in? We agree all of these folks should show us the real numbers before crying poverty, meaning, cable TV is no more a legitimate expense than a Mercedes! Not going to argue costs vs expenses unless we can do a P&L audit. Government not listening to business? Business has the chamber of commerce, from this perspective the CoC should add labor to their equation as part of the required ingredients to a viable business, from this perspective the CoC only looks as labor as an enemy draining profit not as a key ingredient to success, guys got to think “win-win” , the living wage same as earlier, think win-win. Paul this is a fair and accurate point, the wealth continues to flow to the 1% or less, folks sooner or later there will be civil unrest, the framers clearly warned us of this in the preamble, from this perspective the risk is great and rising that you may lose it all, it has happened in every country, nothing says it can’t happen here, better to be benevolent now, in the end the extra $ do nothing other than inflate an ego, are folks that weak?

      • Submitted by John Appelen on 01/27/2017 - 08:33 am.

        Good Point and Question

        “if folks can’t support themselves W/O government assistance, we have an issue”

        “Is it a life style issue or a financial issue? ”

        The question then is what is causing the issue and what should be done about it?
        What if the cause is a failure of government policy and services?

        We know that most well educated and/or well skilled employees have ok to good paying jobs.

        Those who struggle the most often have low academic capabilities, low skills and/or are in single Parent households. We already provide a great deal of free public education and welfare support, what do we need to differently?

        • Submitted by Dennis Wagner on 01/27/2017 - 09:42 am.

          Back to the same old contentious point!

          The wealth continues to flow to the 1% or less, folks sooner or later there will be civil unrest, the framers clearly warned us of this in the preamble, from this perspective the risk is great and rising that you may lose it all, it has happened in every country, nothing says it can’t happen here, better to be benevolent now, in the end the extra $ do nothing other than inflate an ego, are folks that weak?

          17 Agencies (we can discuss common good effective or not) cost per American ~ $22.36, cost to subsidize wealthy home ownership $296.29/American more than 13X. Thought is, when do we have enough wealth to come off of Government supported welfare? Tax credits and deductions (from this perspective) are just as much welfare as getting a monthly check.

          https://www.msn.com/en-us/money/markets/trump-wants-to-kill-these-17-agencies-heres-what-they-cost/ar-AAmb4mO?li=BBnb7Kz

          • Submitted by John Appelen on 01/27/2017 - 01:44 pm.

            Thoughts

            Please remember that most deductions and credits are in the tax code to encourage citizens to do something. (ie buy homes, have kids, work, invest, go to college, buy solar panels, etc)

            Other than preventing anarchy, what are the benefits of higher minimum wages, welfare, Medicaid, etc to our society?

            Please remember that all of them increase the cost of living and doing business in America, since they all mandate the giving of extra monies to people above what society thinks they should be earning. And we have to pay a large number of bureaucrats to operate the systems and address fraud.

            The question is how to get people educated/skilled and working in good jobs… And how do we reduce the number of available workers (ie no Illegals) in the lower level jobs so folks pay them more or automate it. (ie which creates different jobs)

            • Submitted by Dennis Wagner on 01/31/2017 - 02:53 pm.

              Only 1 point

              The cost of paying some exec millions-billions of $ a year also increases the cost of the product: Wasn’t a few topics ago that it took ~ 3,000, $1500 a month healthcare payments (for the entire year) to compensate 1 health care CEO for 1 year. My compass, says that is obscene. And yes that CEO’s pay increases the cost of living as well, $1500 is ~ $8.33/hr that is more than minimum wage, W/O benefits!

              We can discuss, corruptness of deductions and credits any time, not sure how many illegals are taking CEO jobs? Am very good at taxes, have done my own for 50 years, and business taxes for the last 15-20, as well as having exposure to or directly working with CFO’s on business taxes for multi million $ companies since ~ 1987.

              • Submitted by John Appelen on 01/31/2017 - 04:10 pm.

                Kind of but I think a lot of Executive Mgmt Compensation is tied to stock price, not sure how that is tied to cost of product / service.

                However I do agree that some CEO’s are over compensated.

  14. Submitted by Paul Udstrand on 01/28/2017 - 02:14 pm.

    Just a little background on the origin of $15 and living wages

    Most Americans whenever they’re asked say that they think employers, not tax payers should bare the burden of wages and salaries. With that in mind let’s look at some numbers:

    Around 40% of those collecting food stamps typically work for at least 48 weeks out of the year. A single mother earning $10.00 an hour (50 cents more than minimum wage) still qualifies for food stamps and subsidized housing, a subsidy like that can be worth as much as $10k a year. To give us some additional perspective the MN Dept. of Labor tells us that around 48 thousand Minnesotan’s work for minimum wages. Even if only half of those worker qualify for welfare that amounts to a subsidy of $48-200 million a year. However, the SNAP, the food stamp program actually serves over 500k Minnesotan’s a year and costs over $600 million. We know that a quarter of those served are seniors but the remaining 375k are children, adults, and working adults. THAT tells us that we’re not just subsidizing 24-48k minimum wage workers, we’re subsidizing many more workers, which brings us to our $15 an hour.

    The Massachusetts Institute of Technology has created a living wage calculator that is broken down to each state and individual country, you can look at the Henn. Co. calculator here: http://livingwage.mit.edu/counties/27053

    If you look at the chart you’ll see that actual living wages for most scenarios are well above $9.50hr and living expenses are well above federal poverty levels which have always severely underestimated poverty incomes. For instance the MIT chart estimate that our single mother with two children requires an annual income of $51k but the federal poverty level for a three person household is $20,090.

    A $15 minimum wage would give our single mother an annual income of $31k, that would get her off of food stamps but it wouldn’t put her on easy street. In fact even a $15 minimum wage is still too low for many scenarios, especially if that worker gets no paid vacation, or sick time. If they’re employer steals their wages as Walmart has frequently been caught doing it gets even worse.

    Sure, people can live more or less expensive lifestyles but it’s important to remember that in terms of economics there’s no such thing as “entry level” wages. A job is a job and if it doesn’t pay a living wage it’s actually a drag on the over-all economy. Yes, you could say that living expenses for a single adult are less than those for a married person with kids; but that single adult is in a demographic that’s most likely to be trying to pay college tuition and or attending classes while working, so you can’t say that the single adult doesn’t “need” a living a wage just because he or she isn’t buying baby food. Work is work and people don’t work just to pay expenses. We’re all supposed to enjoy the fruit of our labor, and that means being able to spend time with family, pursue interests, travel, and god forbid retire some day in relative comfort.

    You say: “well people should move up and out of minimum wage jobs” but you can’t move up and out and when you’re living from paycheck to paycheck and you’re never more than two paychecks away from not being able to pay for food, rent, or mortgages. Living wages give people the space and resources they need to be food secure, pay for additional education, etc. And you have to remember the vast majority of people in any capitalist economic system will be labor, we can’t all be owners or mere investors, so “investing” or starting your own business can never be a financial solution for most people.

    One thing that is completely missing from this entire article is any discussion whatsoever about how much $10k more a year would improve he lives of minimum wages workers?

  15. Submitted by Paul Udstrand on 01/28/2017 - 02:25 pm.

    Liberal shmiberal

    About these democrats who are so uncomfortable being “liberal”… this is the problem. Living wages and decent and humane working conditions are basic basic basic liberal principles, these are not “leftist” agendas. To the extent that some democrats are uncomfortable with liberal agendas it reflects on the status of the democratic party that sees it’s mission as a firewall against progressive agendas rather than a champion of progressive agendas. The fact such tame initiatives can even be described as “one-sided”, “over-reach” etc. just tells us how completely AWOL liberals have been for decades among democratic candidates. It also tells us a little about the orientation of the media when THEY describe such basic liberal propositions as “radical” or “leftist”.

  16. Submitted by Paul Udstrand on 01/29/2017 - 10:09 am.

    By the way about that 2.3% Graco raise in 1997

    Graco gives us a perfect example of why laws and ordinances like this are necessary in the absence of collective bargaining. Graco simply eliminated paid sick leave in 1997. The idea that an employee in 2017 is just supposed to set 2.3% of their salary aside for sick days and they “know” it, is not paid sick time. Now if everyone working at Graco makes at least $90k a year, telling employees to open a savings account for sick days may not be bad advice, but I doubt that’s the case. Any employer could say the same thing no matter what the wages: “Well open an savings account”.

    And again, since we don’t know (did the reporter ask?) what Graco is actually paying the majority of its workers that 2.3% from 1997 doesn’t tell us anything. For instance at $15 per hour a worker would bring home (after payroll deduction) $11.50 which would yield 27 cents an hour for sick time. At that rate it would take 55 days to save one day’s pay, or six and half days per year. And this assumes that a worker won’t have to dip into their savings for ANY other reason…. Again, savings accounts are not paid sick time and it’s silly for an employer to suggest that they are.

    American employers have been using techniques like this to reduce their payrolls for decades. They “switch” to something that’s supposed to be equivalent but actually pays less. For instance many people used to get separate vacation AND sick days which have been replace by one paid time off calculation. Typically employees are told that it’s just lumping both payments into one, which actually makes sense, but when you run the numbers you see that you lost a few days in there.

    • Submitted by John Appelen on 01/30/2017 - 11:33 am.

      Question

      Silly question. Why should a company be paying an employee when they are not at work?

      By the way, the companies I have worked for simply combined vacation and sick time into one bucket called Paid Time Off… Which works great for me since I almost never get sick.

      The new employees used to get 10 days per year and now they get 17…

      From this and what I have heard Graco is a pretty great company to work for.
      http://www.graco.com/us/en/about-graco/careers/benefits.html

  17. Submitted by Paul Udstrand on 01/29/2017 - 10:40 am.

    Don’t get me wrong…

    I’m not anti-business, business is an essential component of our economy, without it there’s no commerce. Many business owners are decent hard working people who care about their employees and strive pay fair wages, and those employers obviously deserve a place at the policy table, they have a voice that should be heard. But having a voice doesn’t mean you run the table, we have competing interests and those have to be balanced.

    Living wages and paid sick time are not “leftist” attacks on capitalism, these are decades old basic FDR New Deal principles. If they look like “leftist” agendas to you, that’s because basic liberal agendas have been absent on our political landscape for so long. The conservative agenda has for decades now been to roll back the 20th century, i.e. labor rights, gender rights, racial equality, environmentalism, Social Security, etc. If you look at that and say: “Well, maybe just a little here and there…” You need seriously reconsider what kind of liberal you are. The problem may not be leftist agendas, the problem may be YOUR comfort zone.

  18. Submitted by Dan Berg on 01/30/2017 - 02:59 pm.

    Trumpian Economics

    Minneapolis seems to be following a Trump style ecconimic policy. Both want to increase the cost of labor just through different methods. Trump by limiting access to other labor markets and Minneapolis simply enforcing directly a higher labor rate. The trouble is of course that both will fail completly. Beyond the general inflationary pressures these polices cause there is a bigger problem. Higher minimum wages will be paid by those who spend the most on the goods and services created by that sector of the work force. That isn’t the wealthy. The wealthy already tend to pay much higher labor rates because the goods and services they purchase are higher end and demand higher wages. The things they spend money on wont be much effected. Meanwhile the lower and middle classes will see meaningful, to them, increases in prices for basic items like groceries, gas, and low cost goods from places like Target and Walmart.

    Populist, protectionist rhetoric and policies have always been and will always be simple minded hooey.

    • Submitted by Connie Sullivan on 01/30/2017 - 04:39 pm.

      Tnhe wealthy do not pay higher labor rates for goods or services they receive. If you think that a high price for a sweater at Saks or Nordstroms versus the somewhat lower price at Target is a result of what the sweater-maker (at the machine) or retail clerk (at the cash register) is getting, you don’t understand business.

      A worker in the US getting $8 an hour,gross pay earns $16,640 (gross, minus 7.75% for FICA). That’s less than 1380 a month. With rents in the Twin Cities hovering around $1000 for a studio apartment, that person has to live with at least two or three other adult full-time wage earners.

      We’re not talking folks with six-figure incomes! We’re talking people whose children will never be able to afford college or trade school, and who will be at the bottom of our economic system all their lives.

      Incredible, the way so many Americans have no real idea of how hard it is to exist at non-living wages.

      • Submitted by John Appelen on 01/30/2017 - 08:21 pm.

        Proposal

        How do you want to resolve this problem?

        Please remember that arbitrarily raising the minimum wage and random tariffs both increase the costs for all US based businesses and consumers.

        And unfortunately US history shows that American consumers will buy from the lowest cost / best value supplier. Be they a foreign or domestic firm.

        I support earned income tax credits because they are funded by our progressive income tax payers, not by the poor or the elderly on fixed incomes.

        The other alternative is to remove illegal workers from the US work force until unemployment and wages are where we want them.

      • Submitted by Dan Berg on 01/31/2017 - 04:11 am.

        You misunderstand

        My point is the wealthy are not effected by moving the minimum wage from $8 to $15 an hour because the people they hire already earn more than that. Yes, a part of the price difference at Nordstrom verse Target is the relative wages they pay. Those working at high price restaurant earn more than those working at McDonalds. The wealthy have custom cabinets made by a highly paid carpenter rather than picking up a press board box from the cashier at IKEA. Moreover the wealthy pay a much lower percentage of their income for basic items like gas and groceries which might be effected by a minimum wage increase.

        Increasing the minimum wage will most effect the prices for the items made or served by those making minimum wage. Those happen to be those most often consumed by those of low or modest means. This means no net gain for the people the policy is trying to help. Implementing a higher minimum wage has the side effect of implementing a regressive tax at the same time.

        The fact I understand the policy is pointless and ineffective has no bearing on my ability to understand how difficult it is to live on so little. The idea that the intent of the policy has any bearing on its effectiveness is the height of niavitey.

  19. Submitted by Paul Udstrand on 01/31/2017 - 10:26 am.

    A few quick points:

    There’s nothing arbitrary about the $15 minimum wage, it’s derived from economic research based on various real life scenarios the working poor have to contend with.

    “Illegal” workers have nothing to do with this and there’s no reason to assume that employers would raise pay for “legal” workers as a matter of course. If the minimum wage were still $3.25 rest assured those employers would be paying $3.25.

    Labor is a business expense like any other business expense, the idea that business models are based solely on “cost” control rather than revenue vs. costs pretends that revenue is always fixed and never grows. The failure to grasp this simple principle is why these guys always crash government budgets when they get into power.

    We’ve already discussed “inflation” so there’s no point in circling back to it beyond pointing out the fact that raising the wages for the working poor won’t bump up the over-all inflation rate, price increases would be limited to certain industries and consumer prices, i.e. restaurants and those price increases would be easily absorbed by consumers. To the extent that owners might have to “share” more profit with their workers, again, that’s not an outrageous proposal, it’s simply the cost of doing business.

    It is silly to ask why people should have paid sick time so I won’t bother answer that question, suffice to say that the vast majority of American’s believe that we should all get paid sick time.

    • Submitted by John Appelen on 01/31/2017 - 02:04 pm.

      Cycles

      Apparently the Law of Supply and Demand must not be real. The idea that employers would need to make some significant changes if 11,000,000 illegal workers were pulled from the American workforce must not be real either. I of course disagree. I think those changes would be higher compensation, better benefits, more automation, etc.

      Well we are making progress if you are acknowledging that the consumers will pay the increased wages. What will also happen is that it will bump up inflation a bit which then triggers inflation adjusted increases, which increases things some more and the cycle continues. This will be good and bad… some people will have more, some people will have less and American Made products will become a little more expensive compared to foreign made.

      • Submitted by Dennis Wagner on 01/31/2017 - 03:22 pm.

        Amazing!

        One article the argument is workers wages should be kept down because they drive up product costs, and that is bad, next article, its ok! W
        Who says consumers will pay increased prices, probably not so much if, they have alternatives and or they feel poorer. Economics seems a bit more complicated than many folks like to admit, as well as the laws of unintended consequences. (Freakonomics).

        A simple thought: Send 11Mil to a country that already has an employment problem, (what if they don’t take them back?) you think folks won’t become desperate? Why are they here in the first place? So build a wall and then what: Start shooting them when they come over again? They will, there is no other means of survival! Or better as a neighbor to watch the country turn to chaos and less government than they have now, will that make the US safer when the cartels run all of central America and Mexico?

        • Submitted by John Appelen on 01/31/2017 - 04:07 pm.

          Then let’s keep them here and keep sending more jobs to Mexico…

          What does that do for / to our fellow American citizens who are unemployed and/or low paid?

          Please remember that in my dream world, the American consumers would choose to buy higher cost products and services from American workers of their own free will… This would be great because it would encourage companies to manufacture here without any need for tariffs, trade wars, deportations, minimum wages, etc.

          Unfortunately we tend to look for the best value for ourselves, not what would be best for the American workers. That is why our trade balances are so out of whack.

          On the other hand if we weren’t sending a fortune to China, Korea, Mexico and the other countries every year, their citizens would be worse off…

          It is a complicated topic, that is for sure.

          • Submitted by Dennis Wagner on 01/31/2017 - 09:18 pm.

            Well:

            Some jobs are going yes, price for a level of free market. As we have discussed many times, they are lower end jobs. A stable, healthy country south of the border is good for America, it relieves the pressure to illegally immigrate, why, because they can find a job in Mexico that pays the bills, and don’t have to risk their life coming across the border etc. etc.

            In order to be competitive we need to up our game, Came out of the tech industry started in 1984, if we didn’t invent, or up our game we were dead, (2 out of 4 companies are now gone) they couldn’t compete, 2 others are still competing with Taiwanese, Japanese, Chinese, Malaysians, Europeans and Singaporeans, etc. we had/have one nice patent portfolio, but had to fight to keep folks honest on that as well, (more than our fair share of law suits to protect our IP) business 2017 its rough tumble and bruising, and on top of that we paid better, did better at supply management, turn time delivery, technology and manufacturing precision than our competitors did. No, these are not punch in punch out 8-5 jobs, Most are high end manufacturing, 24/7/365 customer communication strategies right here in Minneapolis ~ 8000 miles from our key markets, exporting 60%+ of our goods and services to the Far East.

            Sorry as you know, I don’t live in a dream world, I live in reality, and that kept us form getting our butt kicked in Tech.

            If you can’t out think, out innovate, out patent, and out maneuver your competitors, building walls is only a solution to rot from within.

            We have (as of today anyway) trade relations with these countries, it would probably take 20-30 years to build the infrastructure (probably centered in an urban area) to replace what goods they send us, and we would need to train and or retrain folks to take those jobs, and one thing is clear, lots of folks in America, don’t want retraining, and they don’t want to move. Not to mention, the life style in America is extremely expensive relatively speaking. Single family house? That is a millionaires dream, and does not exist in most of these countries. My counter parts in Japan, Taiwan, Korea, China, all live in what they call “chicken coop” ~ 160 Sq. Ft. is an average (see below), they are in the more deluxe versions ~ 250 sq ft. Think Minneapolis is crowded, 7,485/sq mi, Manila 41,515, wonder how that compares to the Iron Range?

            On soap box:

            Philosophically: Having worked international since 1978, I consider these folks as much my friends, country men (in a different sense) neighbors etc. as anyone here in the city. At the end of the day we are all human beings on a planet flying through space at 1,040 MPH. If we screw this spaceship up we are all goners, no matter which side of the wall you live on. Point being: Philosophically we are all better off trying to work together, and the framers told us that in the preamble. and I think extending it to the global community is most apropos and aligned with the framers intentions.

            Off soap box.

            Your right it is complicated, but hiding behind a wall is not going to solve anything from this perspective.

            http://static1.1.sqspcdn.com/static/f/465830/5893265/1267032008227/Average-Apartment-In-Taiwan.pdf?token=x1CWk3p6sGeA0P4m333ycSPHeFg%3D

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