Minnesota’s Economic News — W/E 9/24/21
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A University of Minnesota economics professor leading a study underway on a possible $15 per hour minimum wage in Minneapolis will be paid $120 per hour plus benefits under a contract approved by the Minneapolis City Council.
Samuel Myers, Jr., Director of the Roy Wilkins Center for Human Relations and Social Justice at the University of Minnesota, will receive $19,000, plus $6,500 in benefits for an estimated 160 hours on the project, university documents show. Myers earned $183,000 in 2014, according to the Minnesota public salaries database.
Two more participants in the study, including AFL-CIO Chief Economist William Spriggs, will receive $20,000 for their efforts.
But the U of M project proposal suggests Minneapolis got a discount.
“A substantial portion of the time of the Principal Investigator, Samuel Myers, is donated to the project through cost sharing,” according to the U of M plan.
At the same time, critics continue to challenge the cost and credibility of the $175,000 taxpayer-funded study underway on the controversial minimum wage hike proposal before the city.
Concerns include doubts over the report’s objectivity, questionable city spending on the study and city officials’ decision to withhold a legal review of the measure from the public.
“They’re going to get a report written by one side of the debate. Most of the people writing the report, you already know what their position is and how their model works,” said John Spry, a finance professor at the Opus College of Business at the University of St. Thomas who reviewed the 130 page U of M project plan.
Critics point to the organized labor ties of the economists working under Myers. Besides the AFL-CIO’s William Spriggs, the group includes William Rogers III, an Obama Administration labor transition team official and Rutgers University public finance professor. Their uniform support for a minimum wage increase raises a red flag in some quarters.
“Sure looks like there’s a thumb on the scale,” Cam Winton, labor-management policy expert for the Minnesota Chamber of Commerce, said in an email.
“The risk to both business owners and low wage workers is too great to risk a biased report,” said Dan McElroy, President of Hospitality Minnesota, which represents businesses with thousands of minimum wage jobs.
But Myers lauds the “star studded expertise” of a team rounded out by two economists from the Economic Policy Institute, an organized labor-supported think tank.
“Research partners are selected by the Roy Wilkins Center for their expertise on a particular issue, and not for their support or opposition to a particular policy,” according to a Humphrey School of Public Affairs statement.
EPI will receive $25,000 for the services of economist David Cooper and EPI President Lawrence Mishel.
The EPI board includes AFL-CIO President Richard Trumka and Rep. Keith Ellison, (D-Minn), who represents Minneapolis. Ironically, the AFL-CIO has, in other contexts, sought an exemption from a $15 minimum wage for its own union employees.
“The principal investigators (some of whom we have done research with in the past or have published) for this study were in touch with us to draw on our extensive experience modeling the impact of the minimum wage in particular regional and state areas. We expect to receive very modest compensation,” Mishel said in an email.
Meantime, Minneapolis City Attorney Susan Segal is still analyzing whether state law allows cities to impose a local minimum wage above the $9 per hour statewide floor. But her analysis will remain secret.
“It has not yet been completed. It will be provided to our elected officials and will not be available outside of those within the attorney client privilege, unless the Council votes to waive the privilege,” Minneapolis City Attorney Susan Segal said in an email.
“As a resident of Minneapolis, I am the city attorney’s client. When it comes to the city attorney’s work product tied to policy making decisions, they have no privilege to withhold that information from me,” said attorney Peter Nelson, Vice President and Senior Policy Fellow at Center of the American Experiment.
City officials also face criticism for spending $150,000 in taxpayer funding—Minneapolis’ share of the cost—on an issue that may be unconstitutional.
“The issue is whether we have the authority as a city to impose a minimum wage on the employers in the City of Minneapolis. We don’t know what the answer is. And that’s a concern to me because we just spent $150,000,” said Minneapolis City Councilor Blong Yang, who opposes a minimum wage increase.
In a departure from the original project description, Myers’ team will not investigate the unintended consequences of a minimum wage increase, but focus on “household food security.” Unintended consequences include potential job losses and higher prices for goods as a result of higher labor costs for businesses.
“What’s coming out of the advocates of the higher minimum wage are that you can have a higher minimum wage without adverse trade-offs, so you don’t have to make a choice. My reading of the economic literature is it’s clear that there are trade-offs,” University of St. Thomas Professor Spry said.
“It would have a huge impact with businesses closing, businesses moving out to the first ring suburbs that are right next to Minneapolis,” Yang said.
But Myers insists his methodology will hold up upon completion in early summer.
“It is the norm for work produced by the Center to be circulated for peer review, which reflects Professor Samuel Myers, Jr.’s commitment to ensure that any study is undertaken in a rigorous and objective manner and meets the highest of academic standards, and he welcomes scrutiny over the final product,” the Humphrey School statement said.