St. Paul Passes $15 Minimum Wage; Second City in Midwest to Back $15

Photo credit: Fibonacci Blue

In response to the St. Paul City Council’s passage of a $15 minimum wage, Christine Owens, Executive Director, National Employment Law Project, issued the following statement:

“St. Paul has made history today as the second city in the Midwest to adopt a $15 minimum wage for its workers (Minneapolis was the first).

“For too long, working people across the country have not shared in the economic gains and recovery that have benefitted corporations and those at the top. A $15 minimum wage recognizes the value that St. Paul’s workers bring to the area’s thriving economy and the central role they will play in its future.

“By rejecting the restaurant industry’s pressure to carve out tipped workers, and by rejecting the idea that it is acceptable to broadly exclude younger workers from a wage increase even though they perform the exact same work as their older co-workers, St. Paul shows how we can promote an inclusive economy that recognizes and rewards all work.

“Today’s victory belongs to our partners in the city, including 15 Now Minnesota and Centro de Trabajadores Unidos en la Lucha (CTUL), and first and foremost, to the working people of St. Paul who fought for a just wage for their work.”

Background

Since the Fight for $15 began in November 2012, more than 40 cities and counties and more than 20 states have adopted minimum wage increases. NELP estimates that about 19 million workers have won about $62 billion in annual raises—and a growing numbers of U.S. states and cities in just the last few years are adopting a minimum wage of $15 per hour. SeaTac, Washington, which was the first city to do so, approved a $15 minimum wage in 2013. San Francisco Mayor Ed Lee brokered an agreement between labor and business to place a $15 minimum wage on the November 2014 ballot, which the voters overwhelmingly approved; and the Los Angeles City Council approved a $15 minimum wage in 2015. Other cities and counties that have approved a $15 minimum wage to date include Seattle, Washington, Washington, D.C., Montgomery County, Maryland, Minneapolis, Minnesota, Flagstaff, Arizona, and over fifteen California cities. California and New York approved a statewide $15 minimum wage in 2016, and Massachusetts approved a $15 minimum wage in 2018. More than 10 million workers have benefitted from these $15 minimum wage laws so far.

According to the approved bill, an increase in the St. Paul minimum wage to $15 per hour stands to directly benefit 56,000 workers—or 31 percent of the city’s workforce. St. Paul workers simply cannot make ends meet on the state’s minimum wage. The Economic Policy Institute’s Family Budget Calculator estimates that a single worker with no children who works full-time needed $17.78 per hour in 2017 to make ends meet in the Minneapolis/St. Paul/Bloomington metro area, and a single worker with one child working full-time needed more than $32 per hour in 2017 to afford the basics. The cost of living in the St. Paul region is among the highest in Minnesota.

Both St. Paul’s and Minneapolis’s $15 legislation are notable because they rejected the restaurant industry’s efforts to exclude tipped workers from the full minimum wage by creating a tip credit. Minnesota is one of seven states that guarantees One Fair Wage for tipped workers and non-tipped workers. Ensuring that all workers, including tipped workers, are entitled to the same base minimum wage regardless of tips received is a crucial part of any minimum wage increase that seeks to make a significant difference for low-wage workers. The complex subminimum wage system for tipped workers is difficult to enforce and results in widespread noncompliance. It has also been tied to higher rates of poverty and economic insecurity for tipped workers.

Opponents of the legislation may argue that it will result in job losses, but the most rigorous research over more than 25 years—examining scores of state and local minimum wage increases across the U.S.—demonstrates that these increases have raised workers’ incomes without reducing employment.

This past September, economists at the University of California, Berkeley, released a study examining the impact of raising wages in Chicago, Washington, D.C., Oakland, San Francisco, San Jose, and Seattle. All six cities are implementing a $15 minimum wage with the exception of Chicago, which adopted a $13 wage by 2019. The study focused on the food services industry as an indicator of the effect of wage increases on minimum wage workers. Instead of finding that increased wages hurt workers at the lower end of the economic ladder, the study found no significant negative effect on jobs and that a 10 percent increase in the minimum wage boosted earnings in the food services industry from 1.3 to 2.5 percent.

A different, widely circulated Seattle study published last year reached a conflicting conclusion that the city’s minimum wage increase had cost jobs. But it has come under fire for its serious methodological errors, and economists who initially took notice of it have since backed away from it. The study’s authors have also published a new study of Seattle’s minimum wage in October 2018, finding that low-wage workers in the city are all better off after the minimum wage increase.

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The National Employment Law Project is a non-partisan, not-for-profit organization that conducts research and advocates on issues affecting low-wage and unemployed workers. For more about NELP, visit www.nelp.org.


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