The Citizens League Minimum Wage Study Committee met on Thursday, August 16, 2018 for their last meeting at University of St. Thomas. Check out last week’s recap on the thirteenth meeting here if you missed it.
The committee started the meeting discussing their thoughts and comments on last week’s meeting. A concerned member opened the discussion on tip credit and encouraged members to look at the tip adjustment more deeply. Another concerned member reminded the committee that the restaurant and beverage industry is a very broad business and that its value to our economy should not be overlooked. Other members commented based on their experience and the past week’s findings, as well as their overall experience with this process to date.
Thomas Durfee presented his final research to the committee on employment and earnings effects of minimum wage tiers. Thomas updated his input on the benefits cliff “if a family is on MFIP, they automatically skip the waiting list” to receive other benefits such as CCAP. Cities and counties can contribute dollars to their own CCAP. Last, working students under the age of 18 do not count towards CCAP, energy assistance, Section 8, or SNAP eligibility. Thomas updated his research on wage tiers for workers with a disability and reported there are no studies that discussed minimum or subminimum wage specifically. Instead, the studies he has found have focused on discrimination based on disability status. Based on two scholarly publications on tips and employment, Thomas reported economists have serious debates on the effects of earned tips and hours for full service workers. Click here to see Thomas Durfee’s research update.
The Citizens League staff reviewed the committee’s past week of homework, that included drafting potential scenarios for consideration and voting during this final meeting. Members discussed their concerns about implementation of a proposed ordinance, among them being: the phase-in time, how businesses would comply, how and in what capacity the City will be able to provide enforcement, Other concerns were raised about more specifics in proposed recommendations: disability workers, youth workers, seasonal workers, micro businesses, revenue vs head count to determine a business size. The committee largely agreed that they simply did not have enough time to delve deeply enough into all the issues, which left them feeling somewhat hampered in their ability to be more specific in recommendations.
After significant discussion and subsequent whittling down of scenarios on which the committee would vote, three scenarios remained on the table and all will be advanced into the final report. Citizens League staff will send a draft for committee review/approval prior to submission to the City by the deadline, August 31.
The meeting ended with closing remarks. Co-Chairs B Kyle and Rick Varco thanked everyone for participating in the study task force. They gave special thanks to the Office of Mayor Melvin Carter, Office of Council Member Chris Tolbert, and the Citizens League.
The finalized report is due on August 31, 2018.
The third session is scheduled for Saturday, September 15 from 9:00 AM - 11:15 AM at the Hmong Elders Center located at 1337 Rice Street, Saint Paul, MN 55117. RSVP here. Share on Facebook here.
The fourth session is scheduled for Thursday, September 20 from 5:30 PM - 8:30 PM at the Palace Community Center located at 781 Palace Avenue, Saint Paul, MN 55102. RSVP here. Share on Facebook here.
The Citizens League Minimum Wage Study Committee met on Thursday, August 9, 2018, at the University of St. Thomas. Check out last week’s recap on the 12th meeting here if you missed it.
The committee reflected and debriefed on last week’s meeting. Members shared their concerns on the short amount of time they have left.
Thomas Durfee’s research update to the committee was a progress report on Wage Compression, the Benefits Cliff, and Firm Size. Wage Compression is “when the distribution of wages within a firm is closer together” and it matters to minimum wage because “Distribution may be a goal. High compression means more equality and low compression means less room for change.” Thomas disclosed to the committee that the case studies he reviewed were small sample sizes. Which is unfortunate and revealed that there is a necessity for more research and data on wage compression before and after effects.
Thomas then moved on to the next update: understanding the benefits cliff. Programs to consider are: Medicaid, Section 8, Child Care Assistant Program (CCAP), and Supplement Nutrition Assistance Program (SNAP). For the sake of time, Thomas broke down the information from Children’s Defense Fund into hypothetical situations, based on Ramsey County cutoffs, and household eligibility vs benefits actually received. Overall, assuming there is a phase-in to $15/hr minimum wage, the vast majority will lose their benefits gradually starting at approximately $13/hr, while ramp-ups to significant benefits takes more time. Only a small niche would be in a better financial position than they are today -- primarily a single with no children. Committee members pointed out that housing expense was not reflected in the graph, though it can have significant impact on the benefits cliff. Another concerning issue in the hypothetical household scenarios was that families making a $15 minimum wage may be better off, assuming they actually are receiving the benefits for which they are eligible. That is not always the reality. Due to time constraints, firm size and tips were not discussed. Click here to see Thomas’s progress report on wage compression, benefits cliff, and firm size.
Prior to the meeting, the committee members were given homework to analyze and propose various minimum wage scenarios. During the remainder of this meeting, then, the submitted write-ups were presented to the committee and voted on anonymously. The intent was to identify potential areas of agreement across the committee members and where, perhaps, the widest gaps in agreement would be identified. The proposed scenarios addressed the main areas of focus: is $15/hr minimum wage the right number and should it be indexed to inflation (or not); various versions of a proposed tip adjustment (or not); proposed exemptions; and a wide range of potential phase-in time periods.
Next week is the last meeting of the $15 Minimum Wage Study Committee, during which the committee will review and complete their recommendations on minimum wage for the City of Saint Paul. Questions and requests for additional meetings were requested, but the Citizens League is scheduled to deliver its final report on August 31. There will be an opportunity for formal public input following that date. Stay tuned for details in the coming weeks.
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).
The Citizens League Minimum Wage Study Committee met on Thursday, June 21, 2018, at the University of St. Thomas. Check out last’s week recap on the sixth meeting here if you missed it.
Co-chair B Kyle opened the meeting by asking for feedback on the last week’s meeting. The networking activity had a good response from the committee members. They just wish they had more time to do more!
At that point members voiced questions about the process and work plan of the task force into the coming weeks. Several felt that they are ready to bring their suggestions to the table. Pahoua Hoffman reminded the committee that they are still in phase one: the learning phase. “You can’t learn and defend at the same time.” She will bring the timeline next week; however, committee members are encouraged to continue collecting data and holding their recommendations until next month.
The theme of this meeting was “tip credit.”
First, the committee heard a presentation from Jennifer Schellenberg, server from Northbound Smokehouse & Pub and representative of Restaurant Workers of America. Jennifer introduced the committee to three potential minimum wage tiers:
The presentation went over the time due to the intensity of the topic. The Citizens League staff will be working on more visual and digestible infographics on how the tip credit and super wage would apply. Jennifer’s presentation can be found here. Other related articles and reports Jennifer mentioned in her presentation can also be found here.
The committee spent some time discussing the loophole on reporting cash tips. It is federal law to report all tips earned – both cash and those paid electronically on a credit or debit card – but, unfortunately, when cash has little of an accountability trail, servers acknowledge that at least some of that cash goes unreported.
The committee had little time left to hear from other panelists who represented food and beverage industry. Jamie Robison, majority owner of Northbound Smokehouse & Pub, spoke to his challenges and his recommended solutions to the committee. His document can be found here.
Torrence Beavers, Executive Chef at Brunson’s Pub, shared with the committee the harsh reality of being a “back of the house” staff person. “We are the first to get cut [when employers go through financial crisis].”
Jeff Crandall, Bartender at Eagle Street Grille, attested that the tip credit is crucial for employees like him who depend on the extra income. He has over 20 years of restaurant experience from dish washer, host, server, cook, and bartender. A majority of tipped workers make more than the back-of-the-house staff -- almost or above $25/hr according to the Equal Employment Opportunity Commission (EEOC), and it is becoming more difficult for restaurant owners to make a profit.
Robert Crew, Director of Food & Beverages Operations of Commonwealth Properties, shared with the committee his struggles keeping up with the finances of WA Frost. Even with the success of the restaurant, 41% of the revenue paid for labor in 2017 leaving 1-2% profit margins for the business. In 2015 they were making 5-6% profit margins.
The remaining meetings during the month of June will continue the topic of tip credit and adjustments. Committee meetings in July will solely be designated for discussing solutions and recommended actions.
The Citizens League Minimum Wage Study Committee met on Thursday, June 14, 2018, at the University of St. Thomas. Check out last’s week recap on the fifth meeting here if you missed it.
The committee began this week’s meeting by debriefing last week’s panel of small business owners. In retrospect, input of the panelists was undoubtedly valuable, and certainly credible. However, whether or not the panel was completely representative of the small business community of Saint Paul was a question raised.
Last week’s panel was composed solely of food and beverage industry professionals. Obviously, industrial diversity was a pertinent dynamic that was missing. With that, having the opinions of all industries represented became a greater priority. The challenge is how to respectfully gather opinions from underrepresented businesses while not conflicting with the time they otherwise would devote to running those businesses. Although 15 different businesses (including dry cleaners, corner stores, and other retail) were invited, it was unfortunate that more panelists were unable to attend.
The committee then discussed the idea that accepting statements from small business owners, or holding additional meetings with them, may be effective in bringing more ideas to the committee. It also would be inclusive to those who are unable to attend regular meetings due to time constraints. Such a possibility remains open.
The legal research update was brought by Snowden Stieber, Citizens League’s legal intern. The presentation was very direct in addressing the legal parameters of minimum wage laws in Saint Paul given current state laws. A major takeaway from his presentation was, “Cities may pass ordinances which are in addition to, but not in conflict, with state regulations. Cities also may not impose regulations that interfere with state agencies.” The legal research update can be found here.
Following the update, the committee participated in an exercise that was intended to help committee members get to know each other. Assignments in this exercise included sharing personal life motivations, and seeing how the motives of each member can connect. It was a successful activity that did well at showing the common interests that connect committee members. With justice and compassion being prominent themes, this exercise revealed the common desire to show an appreciation for and make a valuable contribution to the wider community.
Melanie McMahon, Legislative Aide of Councilmember Tolbert, and Jessi Kingston, Director of Human Rights and Equal Economic Opportunity, both were able to come in and share on behalf of the City of Saint Paul. Getting an ordinance drafted and passed “is not a quick process,” said Melanie. Their presentations gave the committee a better understanding of what City ordinance passage, implementation, and enforcement process entails.
The effectiveness of implementation and outreach in the past, within the context of new ordinance implementation, was the most prevalent topic in discussion. This ultimately lead to the question of how does compliance look and, specifically, what does auditing, accounting, and payroll look like to businesses having to implement the change?
This discussion was effective in giving the committee an idea of what would be useful in its recommendations regarding ordinance implementation. Overall, this meeting was very informative as it pertains to city practices and legal limitations. Looking at the community report, the most outstanding comment was one that discussed state law regarding tip adjustment and how this influences the abilities of employers as well as the City of Saint Paul.
With just 8 meetings left, tip adjustment is a topic that is promised to come up in many more conversations, including next week’s meeting – where tip “credit” specifically will be discussed.
The Citizens League Minimum Wage Study Committee met on Thursday, May 24, 2018 at the University of St. Thomas. Check out last’s week recap on the second meeting if you missed it.
Co-chair B Kyle opened the meeting with a question to the committee members: what are their employees’ and networks’ thoughts on increasing minimum wage to $15? Particularly to those who currently make around $15/hour, how would they feel if the other employees’ wages increased to $15? One restaurant owner has been preparing for this increase and deliberately increased his dishwashers, line cooks, and chefs to $15 or more depending on their line of work. No employees have expressed any concern about other employee’s increased wage and were satisfied with their increase. He owns two locations - one in Minneapolis and the second in Saint Paul, totaling 48 full time and part time staff.
Thomas Durfee updated the Committee with his current research analysis on “firm birth” rates (when a business is founded) and “firm death” rates (when a business closes) in the City of Saint Paul. A few problems that Thomas identified were: no data on firm loss; and unemployment data does not provide reasoning WHY a person is unemployed. Thomas will report his findings at next week’s meeting.
The Committee heard a presentation from Jeff Schneider, Strategic Management Team, from the City of Minneapolis on the Staff Report on a Minimum Wage Policy. Jeff first acknowledged to the Committee there are many research studies on the effects of increased minimum wage projections, but not a whole lot on increased minimum wage post-implementation. Where many cities use revenue thresholds to determine exemptions and roll-out timelines, Minneapolis is unique in that they use a head count to determine appropriate roll-out timeline.
The second speaker to the Committee was Brian Walsh, Supervisor of Labor Standards Enforcement Division, Department of Civil Rights, City of Minneapolis. Brian shared his struggles working on the issues of minimum wage, “How do you mitigate the short term pain [for small employers]? There is no answer” and added that “There has to be investments [into partnership communities] in these policies after they pass.” Brian spoke about the value of being proactive to minimum wage issues - such as city working with community led partnerships and how “community policing” of minimum wage compliance should be a community-led enforcement effort.
The Committee asked Jeff and Brian many questions addressing issues including head count exemption, revenue privacy, the department’s budget, wage theft data, and preemptive approach. Brian referred back to Jeff’s comment on Seattle’s approach to minimum wage and how they created a robust Office of Labor Standards that budgeted to work with partnership communities – “Seattle is the gold standard” and is 2-3 years ahead of the minimum wage issue, being the first in the nation to reach out to diverse organizations and recognizing efforts.
A quarter of the Committee members were unable to attend this meeting. These absences, while coincidental, had the effect of leaving out input and insights from those committee members - many of whom represented women, minority owned businesses, people of color, and small non-profits. Because the committee is a representative sample of communities affected by the minimum wage, and one person cannot carry the load of an entire point of view, community engagement and input is important to the process.
The next meeting will be held on Thursday, May 31, 2018 with a panel of businesses that are underrepresented at the table to share their thoughts and concerns with the Committee.
About this blog series: SPACC public affairs staff will be attending each of the study committee meetings and writing a recap blog after each meeting in order to keep our members informed of the process. (Since President/CEO B Kyle is the co-chair and an active member of the committee her perspective will be included just like the other participants, but the blog should not be considered to be her opinion personally or a direct reflection of just her role on the committee.) Since the Citizens League will be publishing exhaustive minutes of the meetings, our blog is not meant to be a complete record, but instead will provide an overview of the high points of the meetings and the content. When appropriate, we will also provide analysis of what committee recommendations could mean for our members. If you have a question about the committee please connect with Shannon.
Employers in Saint Paul with 23 or fewer employees must be in compliance with the City’s Earned Sick and Safe Time ordinance on January 1, 2018. Larger employers have been subject to the ordinance since July 1, 2017.
To understand your obligations, read through this blog post, then read the City’s Rules related to the ordinance. The Rules are 19 pages long, but written in an easy-to-understand manner, including examples for most of the pieces outlined below. It is You can also read the full ordinance, though the Rules are easier to read.
If you still have questions after reading the Rules, check out the City’s Frequently Asked Questions. If your answer is nowhere to be found, contact Marie and she can put you in contact with the right person at the City.
The City of Saint Paul also has a webpage with employer resources, including an Accrual and Balance tool and a model notice you can print for your workplace.
What you need to do before January 1:
If you are an employer with 23 or fewer employees that has a physical presence inside the boundaries of the City of Saint Paul AND you have employees that work inside the City of Saint Paul for at least 80 hours in a year, you must do the following by January 1:
b. Accrued earned sick and safe time for each employee;
c. Used earned sick and safe time by each employee.
The major pieces of the ordinance:
Again, take a look at the City’s Rules and FAQs for more detailed information, and connect with Marie if you have questions.
The City of Saint Paul is considering changing the operating hours of the skyway. The current ordinance requires all skyway bridges to be open from 6 a.m. – 2 a.m., and allows them to be open longer, as the building chooses. The proposed change would require all skyway bridges to be open from 6 a.m. – midnight (so they would close two hours earlier) and would require that all skyway doors be locked at midnight. Building owners would be allowed to keep their skyway open later, if they have someone patrolling the area.
We asked our members with a presence downtown to weigh in on the hours the skyway is open. The majority of our downtown members who responded to our original survey about the skyway were not concerned with the skyway being closed earlier than 2 a.m., and many applauded that change.
We then sent a follow-up email to downtown members asking specifically for thoughts on skyway hours and received 16 responses. 14 of those responses were in favor of the closing, including calls for closing even earlier. A few excerpts:
The other two emails provide good insight into the negative impact this change could have on some businesses.
Email 1, from a downtown restaurant:
Closing the skyway earlier than 2 a.m. would negatively impact [restaurant name].
The skyway is not the problem. Walking the streets has also gotten worse with the escalating population of aggressive vagrants in St. Paul that harass businesses, their customers, and visitors of our city.
Email 2, from a downtown consultant firm:
Our staff has some very long hours as we push toward certain milestones. It’s not uncommon for us to have individuals work beyond midnight and safe skyway access certainly makes that more comfortable when they do head home. I’m not saying that we necessarily are opposed to the skyways closing at midnight, but we can certainly make use of them on a semi regular basis between midnight and 2 a.m.
We will continue to work with the City and other stakeholders to find ways to make every segment of the skyway system as welcoming as possible.
If your views on skyway hours are not reflected here, please give us a call at 651-265-2780 – we appreciate your feedback!