City considers minimum wage increase

Benjamin Farniok

The Minneapolis City Council approved a resolution earlier this month to create a group to research the possible effects of raising the city’s minimum wage.
Though supporters say city officials are taking the right approach to shrinking pay gaps, some business owners and experts are worried that raising the minimum wage would hurt employment.
 
The group will investigate the economic impact of raising wages and consider concerns from both workers and businesses. It will give recommendations to city officials before the year ends.
 
Other major cities across the nation are taking action to lift their minimum wages.
 
On April 1, an ordinance went into effect in Seattle that increases the city’s minimum wage to $15 per hour. The change came after several citywide protests demanded higher pay.
 
Fast food workers and other demonstrators around the country — including Minneapolis — took part in a series of protests earlier this month, calling to increase minimum wage to $15 an hour. More than 600 people gathered outside the Dinkytown McDonald’s on April 15, rallying support for the cause.
 
Ward 8 City Councilwoman Elizabeth Glidden said improving pay for workers in the city would help address income disparities. 
 
As the city recovers from the economic recession, Glidden said, workers of all pay levels should be able to benefit, including those of low-incomes.
 
“Our economy has started to rebound, but those at the lower end of our economy have not rebounded in the same way,” Glidden said.
 
She said she would like to research the economic effects of a potential minimum wage hike before making any policy changes.
 
Though the state Legislature sets the minimum wage threshold, city officials could create ordinances to raise it. Last year, state officials passed a new law to raise Minnesota’s minimum wage to $9.50 an hour by 2016.
 
Last week, a bill passed in the state House of Representatives that would prevent cities from increasing the minimum wage unless the state sets the same standard.
 
A companion bill has yet to be approved in the Senate, and legislators will have until May 18 to approve the measure.
 
Glidden said the City Council opposes legislation that would remove control from city government.
 
While the worker-driven movement is making strides, many business owners in the city oppose a citywide minimum wage increase.
 
Steve Cramer heads the Minneapolis Downtown Council, a group of local businesses. He said an increase could hurt businesses and employment rates.
 
“We think a city-only, higher-minimum-wage-than-the- state policy would be a mistake and would be detrimental to the city’s economy, including workers who have to find employment,” he said.
 
Christopher Phelan, a University of Minnesota economics professor, said a minimum wage increase could make it more difficult for less experienced workers to get jobs and could cause businesses to cut positions.
 
“Businesses are not hiring people out of the goodness of their hearts,” he said. 
 
“They hire someone because they think they will make more money by hiring [them] than not hiring them.”