The Citizens League Minimum Wage Study Committee met on Thursday, July 19, 2018, at the University of St. Thomas. Check out last week’s recap on the ninth meeting here if you missed it.
Given the packed agenda of this meeting, recap of last week’s meeting was brief. Comments shared showed a concern for enforcement, franchises, and the effectiveness of last week’s panel discussion.
Following last week’s meeting debrief, Snowden Stieber presented an overview of exemptions. This overview gave an analysis of the types of exemption: category, size, age, and time. Stieber broke them down further into employer-based and employee-based exemptions. He also provided a comparison of exemptions on the State level and in Minneapolis. To see Stieber’s full report click here.
This week’s panel was comprised of a disability advocacy consultant at Akcess Associates, the chair of government relations practice at Fredrikson & Byron P.A, the LEAP director at Project for Pride Living, and the Executive Director of Cookie Cart. The agenda for this panel was to give insight on disabled workers and youth workers.
Kevin Goodno spoke on behalf of the Minnesota Organization for Habilitation and Rehabilitation, an organization that has not taken a position on the issue but that has members both in favor and opposed to an increase to $15. He gave an overview of DT&H (day training and habilitation services). Services are provided in a variety of cities, and the amount of time spent in Saint Paul can vary. These services refer to those provided by direct care workers who are paid to work with people with disabilities. Disabled citizens who consume these services, are not paid. Between 95-100% of revenue in this field comes from medical assistance. Given the complexity of DT&H work and everything that it entails, an increase in the minimum wage certainly would bring with it some complications – particularly because medical assistance revenue levels are capped and outside of the control of city ordinances.
Rick Cardenas, the panelist speaking on behalf of disabled workers and those who assist them, explained how the disabled typically are hired, but there was some confusion amongst committee members. With complexities such as workers interacting in multiple cities and reimbursement for those supporting disabled workers, it was challenging to capture a clear picture of what is currently being done. However, the desire to have higher reimbursement rates and full employment with benefits (as opposed to contract work) was made clear.
Matt Halley, also a committee member, gave an overview of the Cookie Cart business model, which essentially pays youth to work and learn simultaneously - an earn-to-learn model. Currently in Saint Paul, Cookie Cart hires approximately 100 teenagers to work 4-5 hours a week each, and pays them above the current minimum wage in addition to paying their taxes and social security. While Cookie Cart is not at all opposed to the idea of paying $15, the concern is that every dollar that wages increase will translate to approximately $15,000 in expenses.
Kristy Snyder, the final panelist, expressed her opinion that a $15 wage is an issue of equity. She explained that the despite the development and training that nonprofits provide, young people will choose jobs that pay more. Therefore, in order to keep youth motivated to stay with training programs, nonprofits like Cookie Cart have to offer competitive wages.
Kristy serves on a committee for Step-Up (the Minneapolis equivalent to Right Track), and says that they plan on getting to $15. That said, she also acknowledged that the number of participants likely will have to decrease due to the increased cost, and the program will have to be more intentional about targeting those most in need or at risk. She feels like this is an investment that that should be made, for the benefit of the City in the long run.
In committee discussion, it was clear that everyone understood why $15 is important and would be valuable in youth training, but no one could an answer as to how this will be done without cutting programs or getting money from other organizations or the government. The primary problem with looking to the government is that they will be facing their own expenses with an increase in minimum wage, and citizens ultimately will bear that cost through taxes.
The committee expressed a desire for more conversations/recommendations on potential exemptions. However, there is a concern that there is too much of a focus on “What are the exemptions?” rather than “What are the solutions?”
Next week, the panel will be hearing from Minnesota Private Colleges on the impact of $15 to college students who get paid for work as part of financial aid packages.
The committee, and the Saint Paul Area Chamber of Commerce, want to pause and send sincere condolences to the family and friends of Doug Hennes, University of St. Thomas. Doug was a member of this study committee, a former SPACC board member, and always deeply invested in the community. He will be greatly missed.
The Citizens League Minimum Wage Study Committee met on Thursday, July 12, 2018, at the University of St. Thomas. Check out last’s week recap on the eighth meeting here if you missed it.
Co-Chairs Rick Varco and B Kyle asked the committee members to reflect on June 28 meeting. The members appreciated hearing from the low wage worker panel. The committee thought the restaurant owner from Seattle gave meaningful insights on her experience with $15 minimum wage in her community, but it does not feel relatable to many of the members since the two cities have their own unique challenges.
One committee member expressed an opinion that the new minimum wage ordinance must be coupled with an action plan educating business owners on how to sustain their business with the challenges that will come their way.
Thomas Durfee updated the committee on his findings for pay levels by race/ethnicity. Thomas indicated that these data sets do not have a specific breakdown of the Hmong and Somalian population, though they are two of the largest ethnic groups in Minnesota. One takeaway from his presentation that drew comment from the committee was the Share of Race/Ethnicity by Pay Level, which showed that 20% non-white Hispanic are making below $7.76 per hour vs 8% of white Non-Hispanic. His presentation can be found here.
The next agenda item was the “Tip Penalty Panel” that consisted of servers, a cook, state and federal staff, and restaurant owner/committee member Sam Peterson. All are opposed to a tip adjustment.
Eli Edleson-Stein, a server at St. Genevieve and organizer with Restaurant Opportunities Center, presented on their view of a tip adjustment: “A tip penalty is a policy that allows an employer to pay a worker a subminimum wage if that worker receives tips.” The Center’s main concern is that employers are legally required to make up the difference but that accountability often doesn’t happen. According to Eli’s presentation, the average tipped wait staff in St. Paul makes $12.77 per hour, compared to the top 30 percentile of wait staff in St. Paul averaging $20.31 per hour. And not every server has the opportunity to work at a fine dining restaurant where wages are exponentially greater than the average. Eli credited Minnesota not having a tip adjustment for over 30 years which resulted in the fewest in poverty compared to our neighboring states where tipped workers are experiencing 20% - 25% poverty. Eli’s presentation and additional resources on a tip adjustment can be found here.
Sam Peterson, committee member and owner of Kyatchi, shared his company’s specific experience on how the month of June 2018 looked like for his businesses – and how a $15 wage will impact his business. His average server and bartender made $23/hr in tips + $9.65 minimum wage = $32.65/hr after 20% of the tips are generally shared with the staff. Sam does not believe the $15 minimum wage “will collapse the restaurant industry or that servers are all going to lose their jobs.” Sam’s comments can be found here.
Kristin Tout, Assistant District Director of U.S Department of Labor, Wage & Hour Division, recognizes that enforcing employers’ legal obligation to guarantee rightful wages to employees will continue to be challenging. In Kristin’s line of work, some employers already not paying their employees correctly – though she acknowledges that most errors appear to be due to lack of understanding rather than intent to defraud. Enforcing a tip adjustment will only add on to Kristin’s load. One panel member disagreed with her -- Ken Peterson, Commissioner of Minnesota Department of Labor and Industry, said “there will be loses but not at macro”.
The panel also shared their sexual harassment experiences from customers, which ranged from comments to touching and inappropriate behavior. Harassment was more prominent in gender discrimination, according to the three servers. The context of this discussion is that servers who depend on tips for a good portion of their income can feel unduly pressed to endure harassment.
The committee discussed in depth their next steps after hearing from the panel. Next week, the committee will be hearing a report on firm “birth and death” rates (that is, the time when a business is created or goes out of business).
Guest blog post by American Cancer Society
Nearly 250,000 people will be diagnosed with breast cancer this year.
That could be your mother, sister, daughter, your wife, or even you.
Join us for Making Strides Against Breast Cancer of the Twin Cities on Saturday, October 27 at U.S. Bank Stadium.
The American Cancer Society host Making Strides Against Breast Cancer walks across the country so anyone touched by breast cancer won't have to face their diagnosis alone. We do it to raise awareness and money to fund research, support services, and early detection. Ultimately, Making Strides events help save lives.
The money is used to fund innovative research, provide free information and support programs to patients and caregivers, and to help reduce breast cancer risks or find it early when it's most treatable. That's why your participation in these walks is absolutely critical to our success. The more money we can raise through these walks, the bigger the impact we can make on cancer.
Money raised this year could go towards developing the next generation of lifesaving treatments. Which means you could be a part of the next big breast cancer breakthrough!
Here are a few ways you & your company can get involved: