Wage Wars

For the third time in three years, a proposal to raise Minnesota's economically outdated minimum wage has been drafted. And, for the third time in three years, the bill, sponsored by Sen. Ellen Anderson (DFL-St. Paul), likely won't become law. Never mind that the state's minimum wage hasn't been raised in seven years--it's simply not a front-burner issue, and has little political payoff for legislators.

Despite the current recession, and a "recovery" marked by a slight uptick in lower-paying jobs, many Minnesotans don't even know what the minimum wage currently is, no matter how many pennies they may be pinching. In a 2002 state survey, JOBS NOW, an independent coalition that tracks the state's employment market, found that only one person in ten knew the answer. The actual wage is $5.15 an hour, and 40 hours of work a week will only bring in $208 in gross pay. Anderson's proposal would raise that rate to $6.65 per hour over the next 16 months.

To put current numbers in perspective, according to cost of living research by JOBS NOW, the average annual cost of meeting basic needs for a family of four is about $42,000 a year. That means that if each parent is working 40 hours a week, they both need to make $10.12 an hour to meet that figure. For the minimum-wage-earning parents getting $5.15, that 40-hour work week jumps to 78 hours just to make ends meet.

Though the increase seems unreasonable to opponents, the number could have been much higher. According to Kris Jacobs, executive director for JOBS NOW, had minimum wage kept pace with inflation rates it would now be around $8.44 an hour. "Minimum wage has lost more than one-third of its value since the late '60s," Jacobs explains.

Regardless of what sense there may be in backing Anderson's bill, the minimum-wage issue, like so many things at the Capitol these days, is falling apart along partisan lines. "Democrats are voting for it, and Republicans are voting against it," says Anderson.

Opponents of an increase, speaking mainly on behalf of small businesses, argue that any increase will cost jobs. Mike Hickey of the National Federation of Independent Business is quoted on the state's Senate website saying if minimum wage is increased, "job loss is going to occur--the question is how much and where." Critics like Hickey claim that the majority of minimum-wage earners are teens and young students working primarily part-time jobs, and are not typically the heads of households. Any increase would only serve to put small businesses at a competitive disadvantage.

But the argument is a red herring. And there's reason to believe a good number of Minnesotans are among the working poor. Advocates of an increase point out that a majority of minimum-wage earners--two out of three, in fact--are adult women. Further, many are rural Minnesotans, many of whom have families, working largely in retail jobs and food service positions. They are the ones, supporters like Anderson and Jacobs argue, who deserve a fair shake. Besides, one JOBS NOW survey found that 69 percent of Republicans around the state believe the minimum wage is too low.

Other states have opted in recent years to raise their minimum wage. Illinois is increasing its minimum wage from $5.50 to $6.50 by 2005. Washington's is at $7.16 as of January. In short, Minnesota is woefully behind the curve.

JOBS NOW is insistent that these increases have helped other states' workforces as well as businesses, saying low-wage earners tend to spend more of their money faster. According to Jacobs, "many of these states found no negative effects, but positive effects in raising it." And while critics are quick to point to Washington's high unemployment rate, others cite layoffs in the technology and airline sectors as the cause--not state wage increases. In all, 12 states now have a minimum wage higher than Minnesota's.

So the question remains, if other states have been successful in their efforts, why has passing a bill in Minnesota been so challenging? "It's a little thing called political will," Jacobs responds. "Republicans don't want to anger small business."

When before the Jobs, Energy, and Community Development Committee, the bill did survive three hours of rigorous testimony, and a failed amendment by Carrie Ruud, a Republican senator from Breezy Point, that would have kept wages the same for workers receiving tips. And while an 8 to 6 committee vote did move the bill to the full Senate without a hearing in the House, even Anderson holds little hope that an increase will happen anytime soon.

"I keep hoping that some Republicans will see the light," says Anderson. "But essentially they could just kill it in the House." There is, after all, no real bipartisan support or substantial public outcry keeping the bill alive. And, perhaps not surprisingly, Gov. Tim Pawlenty has yet to comment publicly on the bill.

But Anderson remains undeterred. She repeatedly poses the question, "Where is the governor on this issue?" Maybe she should also be asking, What do the salaries of her opposing senators average out to per hour?

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