Minneapolis Potential Minimum Wage Increase
In a move that follows the movements of Seattle, San Francisco, and Los Angeles, the city of Minneapolis is considering a $150,000 study into the effects of Minneapolis raising the city minimum wage to either $12 or $15 per hour. In Seattle, the wage increase was fought intensely by business leaders, and it would be similar in Minneapolis. Local Minneapolis business owners are already worried about the potential concerns that this higher wage would bring on. Small businesses may not be able to afford to have the same amount of staff at this higher wage, which would force them into layoffs. Many of those effected would be the workers who have least tenure on the lower end of the pay scale, which in many cases would be young workers.
Currently the federal minimum wage is $7.25 per hour. Minnesota on the other hand is already has one of the highest minimum wages in the country, with large businesses required to pay $9 per hour, and small businesses required to pay $8. A large business is defined as, “any enterprise with an annual gross dollar volume of sales made or business done of $500,000 each year.”
The study will look to find the potential impacts in the following areas:
- Which workers will benefit from the higher wage
- Potential job creation or job loss
- Business retention and business loss
- Unintended consequences, i.e. (Shifted costs and impacts on tax/benefit eligibility)
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Sick Leave and Scheduling Proposals
While there is less of an agreement in the wage increase, the city council is united on mandatory sick leave, and fair scheduling. The proposal allows workers to know their schedules further in advance, (1 month), and employees would receive overtime for going over 8 hours. Often times in retail or restaurant hourly positions, schedules are posted with little time in advance, and are commonly changed at the last minute. The proposal would provide stability for the employees, who may have other obligations, such as school or young children.
In regards to sick leave, the proposal is suggesting that an employee earns up to 1 hour of sick leave per 30 hours worked. In a workplace with more than 21 employees, a worker may earn up to 72 hours each year, and up to 40 hours in smaller workplaces. Each of these would be able to be carried over to the next year.
In a recent example, the city of Seattle, WA voted in June 2014 for a city-wide increase in minimum wage of $15 per hour by 2017. In April, the minimum wage was increased to $11 per hour, and has already had a drastic effect. There have been a reported loss of 1,300 jobs in the restaurant/bar business which has been the largest since the Great Recession. Although it is still early, the labor increase at 58% seems to be effecting businesses negatively. In order to combat the rising labor costs, some restaurants have added a 2% “Wage Equality Surcharge.” Tom Douglas, who owns 14 restaurants in Seattle, said he would add this surcharge at each of his restaurants. While this new minimum wage increase so far has effected restaurant owners negatively, and there has been a significant amount of jobs lost, it is still too early to tell the long-term effect of the wage increase.