fbpx

Latest Posts

Home

Facebook

Twitter

Search
About

The details of minimum wage laws show why they are so harmful

Saint Paul’s policymakers continue the process of implementing the harmful $15 minimum wage. Some of the details are proving controversial. As the Pioneer Press reported last week,

With dozens of supporters and opponents filling seating and standing up against the hearing room walls, St. Paul City Council Member Dai Thao spoke passionately in favor of altering a proposed schedule for implementing a $15 citywide minimum wage.

In the end, his pleas to slow an initial rollout of wage increases for small businesses successfully moved the council, but failed to convince a coalition of unions and social justice advocates that he has often counted among his supporters.

“I see a sign in front of me — if you delay my raise, you’ll delay my rent,” Thao told the council. “Well, the same argument applies for (undermining) small and minority-owned businesses. … We should not be fighting each other.”

Councillor Thao managed to get the initial rollout for small businesses slowed, with $1 or 75-cent wage increase each year at the outset, instead of a nearly $2.

The minimum wage for small businesses would climb to $9, instead of $10.50. It would increase to $10 a year later — and reach $15 by 2026.

The minimum wage for micro businesses — those with fewer than five employees — would pay $8.75 instead of $10.25. They would pay $9.50 a year later — and $15 by 2028.

One council member called this “a sensible compromise”. But it isn’t. Setting different rates for small and large businesses exposes the sheer falseness of arguments for a legally mandated minimum wage.

The people waving the signs at the council meeting had a point. We often hear minimum wage hikes justified on the basis that workers are facing increased costs of living. But if this is true for the employee at a small business it is also true for the employee at a big business. If you really and truly believe that raising minimum wage is necessary to combat increased living costs, than you should be completely opposed to any differential in the rate paid to employees of big and small businesses.

Advocating different rates for different sized employers is a sign that the advocate actually believes there is some cost to minimum wage hikes. We know this to be the case. These advocates appear to as well, they just shrink from openly admitting it.

In truth, large businesses in Saint Paul are already paying their workers at least $15ph. This measure has always been about raising costs for the city’s small businesses. Slowing the increase is a sign that, whatever they might say, Saint Paul’s policymakers realize that it will have very real costs. If only they would be honest about it.

John Phelan is an economist at the Center of the American Experiment. 

Comments

Subscribe

Categories

Upcoming Events

  • Morning in Minnesota: St. Cloud

    Location: St. Cloud

    Sign up HERE! Courtyard by Marriott St. Cloud 404 West Saint Germain Street St. Cloud, MN, 56301 Please join Center of the American Experiment on Tuesday, July 21 for breakfast with Center policy fellow and education expert Catrin Wigfall as she explains K-12 education in the state and its persistent disparities despite decades of increased spending. Following her presentation, Catrin will lead a Q&A session. 7:30 AM Check In and Breakfast 8:00 AM Presentation 9:00 AM Conclude   Catrin Wigfall is a Policy Fellow at Center of the American Experiment. She is also the director of EducatedTeachersMN and EmployeeFreedomMN. Catrin’s…

    Register Now
  • Kristi Noem: The Courage to Reject a Shutdown

    Location: Online

    Sign up HERE! Join us Wednesday, July 8th for an interview with South Dakota Governor Kristi Noem over Zoom. In response to COVID-19, Noem defied the norm of a statewide shutdown and let South Dakotans choose for themselves what safety precautions to take. Tune in to this live online event to hear how Governor Noem preserved her state’s economy while still keeping citizens safe. Wednesday, July 8th at Noon CT Sign up HERE!  

    Register Now
  • Morning in Minnesota: Marshall

    Location: Marshall Golf Club

      Sign up for this event HERE! Please join Center of the American Experiment on Thursday, July 16 at Marshall Golf Club for a breakfast with Center economist, John Phelan, as he discusses Minnesota’s economic future. Following his presentation, John will lead a Q&A session. 7:30 AM Check In and Breakfast 8:00 AM Presentation 9:00 AM Conclude John Phelan is a graduate of Birkbeck College, University of London, where he earned a BSc in Economics, and of the London School of Economics where he earned an MSc. He worked in finance for ten years before becoming a professional economist. He…

    Register Now