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.