At the inception of the meeting the committee discussed public feedback received in the previous week. Each week the volume of input is growing, indicating an ever-increasing level of interest in the process. The comments ran the gamut, from disapproval and concern, to the desire for more measurable progress from the committee, to the need for clarity in the data and its explanations.
Co-Chair B Kyle suggested that, in the interests of allowing time for thorough review and intentionality in addressing, community comments be sent to committee members every Monday moving forward, so members may come better prepared to respond and discuss.
The overarching theme of Thomas Durfee’s data report this week was the impact of minimum wage changes on different racial and ethnic groups. The given data primarily is reflective of Ramsey County, and the displayed earnings are based on annual income, The data update can be found here.
Given the research findings, and trends in Minneapolis, Durfee observed that minorities, recent immigrants, and Hispanic citizens are most likely to be fiscally sensitive to a change in minimum wage. He also suggested the use of fiscal policy, minimum wage adjustments specifically, perhaps is not the most direct way to address racial and ethnic disparities – if that is the intent.
An exceptionally valuable aspect of the committee meeting was the presence and input of small business owners.
Tony Chesak, Executive Director of Minnesota Licensed Beverage Association, shared input from a variety of member restaurants. In general, his membership community sees the minimum wage hike as a real challenge for the ongoing viability of their businesses. The profit margin in the restaurant business is in single digits; an increase in minimum wage will translate directly to increased prices or reduced employee count, because these companies have no capacity to absorb additional costs.
Jerry Blakey, President/Owner of Lowertown Wine & Spirits, sees the merit in $15 minimum wage, but for his business it is neither practical nor feasible. He was frank in explaining that a minimum wage hike will translate to either fewer employees or fewer hours among his existing 4 employees. Blakey also shared that, based on input he’s received from them, he thinks his employees would benefit more from improvements in affordable housing and health care options. He is in fear for the future of his business in Saint Paul.
Alinda Suarez, Owner of Taqueria Los Paisanos, does not see a minimum wage increase as something that is affordable for her business. Over the last 10 years she has made it a priority to keep her prices low, doing her best to cater to her community of those who cannot absorb price increases. She estimated that a minimum wage increase would call for a price increase of as much as 30%. And she does not know how/if she could pass on such price increases to her community. She, too, is in fear for the future of her business.
Business owners are considering how to adjust, given the likelihood of a minimum wage increase. Options include: moving toward technology to be more efficient and cut costs (such as automated order entry to replace people). Ms. Suarez feels such a choice would be contrary to her sense of hospitality, which calls for personal and individual interactions. Employers also are considering relocating to surrounding suburbs, which would allow them to keep their employees without having to raise prices. Selling the business is also an option being considered. One employer shared the story of an employee who has indicated he would have to quit if paid more, because he no longer would qualify for benefits, and $15 an hour in itself would not be sufficient to offset the value of the benefits lost. Another indicated that layoffs would be inevitable. And his staff is representative of the community who most can benefit from low-barrier-to-entry jobs – and a supportive work environment – like those he provides.
Overall, these small business owners are very concerned about the ongoing viability of their businesses in Saint Paul, and about their ability to retain their employees. One further expressed concern that those who will suffer the most from this policy change are the intended beneficiaries.
The committee reiterated a commitment to be intentional in its thoughtful approach to guests and commitment to working together collegially. They can look forward to more public input and increased publicity (a news crew joined the meeting for a short time) in the coming weeks.