St. Paul: Think Before You Act on Minimum Wage
On Wednesday evening, St. Paul city leaders came to a wider consensus of their plans to raise the city’s minimum wage to $15 an hour. Earlier last week, Citizens League sponsored by the St. Paul Foundation released a 446-page report confirming the intention of having the minimum wage increase, having it indexed to inflation, and stated that it is expected to be phased in over the next four to seven years.
What exactly is in this 446–page report? The conclusion of it, is as follows:
The committee agreed on forwarding three scenarios to the city of Saint Paul for consideration with percentages indicating the level of support each scenario found within the study committee. All three scenarios include a recommendation of a $15 per hour minimum wage indexed to inflation, as well as exemptions for City-approved youth training programs and disability employment programs. Two scenarios recommend no tip adjustment in the calculation of wages, while one includes a tip credit model that applies to full-service restaurants only with a probationary period and annual reevaluation for effectiveness by the City of Saint Paul.
Based on the developments of this report, the path St. Paul is on is concerning to say the least. Such a drastic increase in the minimum wage from the current state minimum of $9.65 an hour for large employers and $7.87 for small employers to $15 by 2022, is going to have crippling effects on the economy.
For example, two of the three proposals do not allow for tip adjustment, which would hurt St. Paul’s vibrant restaurant industry. In an industry with a 60 percent turnover rate in just a few years, restaurant owners may have to cut staff, or face going out of business under a $15 minimum wage. For many waiters this wage increase is nonsensical, as their median wage in St. Paul is reported to be $18 an hour after tips.
Secondly, two days ago, the Star Tribune reported the negative impact of a $15 minimum wage on students who attend one of the six private Universities in St. Paul. For student workers who currently earn an average of $10.40 an hour, a hike to $15 would most likely see an increase in tuition on the other side. Having students foot the bill either way.
St. Paul, please think before you act.
Jack Campbell is an intern at Center of the American Experiment.