The Metropolitan Airports Commission just adopted the disastrous $15 minimum wage ordinance for an already ailing airline industry
On Monday, October 19 the Metropolitan Airports Commission (MAC) approved an ordinance to increase the hourly minimum wage for the Minneapolis-St—Paul International Airport workers to $15 by 2022.
According to the Minneapolis-St. Paul Business Journal,
The stepped increase to $15 begins Jan. 1, when the airport’s hourly minimum will rise to $13.25. It goes to $14.25 on July 1 of next year before reaching $15 an hour on July 1, 2022.
That’s the same date the minimum hits $15 for the largest employers in Minneapolis and St. Paul, which have both adopted citywide minimum wage ordinances in recent years. Some employers, including Minneapolis Target Corp. (NYSE: TGT) and Richfield-based Best Buy Co., Inc. (NYSE: BBY), have already raised their starting wage to $15 an hour.
The MAC already knows a $15 minimum wage is bad for businesses
According to the report by the Minneapolis-St Paul Business Journal, the plan to raise the minimum wage for airport workers did not just blossom suddenly. In fact,
the MAC has been studying the minimum wage hike for a year and had been on track to adopt the higher-level months ago, but was delayed by the pandemic
Since the pandemic reduced air travel, revenues for the airport and the businesses that operate in the airport terminals dropped, forcing the MAC to set the issue aside. But even without the impact of the coronavirus, businesses were already going to struggle to adopt a higher minimum wage.
As the Business Journal reports, even before the pandemic, businesses were asking for financial help to adopt a higher minimum wage. So, in an unsurprising twist, the MAC plans to take extra steps to ensure that businesses survive the new wage. And that may include raising costs for consumers.
The MAC next month is scheduled to act on a long-term financial relief framework for the concessionaires who operate terminal shops, bars and restaurants. Some were already asking for help adjusting to a higher minimum wage before the pandemic dealt a heavy blow to airport foot traffic.
The MAC has already waived more than $24 million in fees it would’ve collected from those vendors since the second quarter of this year. Long-term relief solutions could include more fee waivers, lease extensions or the option to add a surcharge to customers’ bills
Intentions don’t matter, only results
Once again, however well-intentioned this minimum wage hike is, its effects are clear: higher costs fo businesses and potentially higher prices for customers. This could translate into job losses for some airport workers, as businesses reduce operations or close.