Minneapolis Enacts $15 Minimum Wage in Effort to Eliminate Racial Disparities

The City of Minneapolis enacted a $15 minimum wage to be fully implemented by 2024 to be adjusted each year for inflation five years later. Minimum wages will increase incrementally annually and the the city council commissioned studies at each point to determine the city’s baseline economy and the increase wage’s effects on employment. Large businesses were given five years to reach the minimum wage, and small businesses seven.

Organizers and supporters crowded into the council chambers earlier today and passed out thumbs up/down signs to indicate their support or opposition to the council’s discussions on proposed amendments to the ordinance.

City Council amended and ultimately approved the ordinance with minor changes drafted by the Committee of the Whole two days earlier. Minneapolis hopes that adopting the measure will do much to address and eliminate racial disparities within its borders, and set an example for Minnesota and beyond.

There was concern over the challenges of applying a $15 minimum wage in non-hospital residential medical facilities like assisted-living facilities and home health care. Council member Lisa Goodman said that she was especially passionate about this issue because “the biggest threat to healthcare organizations is the suggestion that the Obamacare bill be revoked and that reimbursements are cut.”

Goodman encouraged the council to fight the federal government when it comes to healthcare. They agreed that the issue needed further consideration and suggested sitting down with the industry to gain an understanding of the challenges faced and then voted to remove the amendment from the ordinance pending additional research.

Amendments that addressed defining the number of employees for franchises and micro-businesses were also deleted so that they could be given further consideration.

As council member Jacob Frey, who is a candidate for mayor, left comments regarding the franchise amendment, signs pointed thumbs down until it was clear that the intention was to make sure national chains like McDonald’s and Arby’s were counted as large businesses. Signs immediately went to thumbs up and Frey replied, “there we go,” which made the audience chuckle.

During closing remarks, council member Blong Yang was the sole voice of dissent. Yang said that he was opposed to the ordinance because he didn’t feel it was good policy for small business, which echoed the sentiments of some in the restaurant industry. Yang also expressed concern that raising the minimum wage would disadvantage teenage workers, prompt Minneapolis jobs to relocate in the suburbs, and potentially create other unintended consequences.

However, the rest of the council echoed the sentiments of council member Linea Palmisano, who said that it was the best thing that they could do to fix racial disparities within Minneapolis.

Image credit: Benjamin Pecka

Mayor Betsy Hodges said although passing the ordinance is cause for celebration, that the there was a need to continue working on the issue because this legislation excludes 30,000 residents who work outside of Minneapolis.

Based on its findings and the City’s vision, values, goals and strategic directions, which has guided its work since Mar. 28, 2014, it appears the council had a strong desire to take this direction after it failed on the state level. Passing the ordinance with only one opposing vote is an apparent message to voters that the council is working to meet its official goals.

“Minneapolis is a growing and vibrant world-class city with a flourishing economy and a pristine environment, where all people are safe, healthy and have equitable opportunities for success and happiness” ~ City of Minneapolis vision statement

The City of Minneapolis found in their research that:

  • Increasing the minimum wage would do much to promote the health, safety, and welfare of those who work in the city
  • Rising inflation and a changing economy has pushed more residents to the “brink of economic collapse”
  • The current minimum wage of $9.50 falls $5000 below the federal poverty level and that the “inaction by federal and state governments … has contributed to the plight of tens of thousands of workers”
  • According to the 2011-2015 American Community Survey (U.S. Census Bureau), there are over 84,000 people in Minneapolis with incomes below the federal poverty level
  • Minnesota Department of Employment and Economic Development reports that a living wage in Hennepin county is $15.25 per hour, and that a living wage for a typical family with two adults and one child is $19.80 per hour
  • 48 percent of Minneapolis workers, or approximately 150,000 people, currently earn less than this living wage
  • Increasing the minimum wage would have a large impact on the lowest income workers of the city, particularly workers of color. Latinos represent 54% and blacks 41% of this group
  • The public welfare, health, and prosperity of Minneapolis requires wages sufficient to ensure a decent and healthy life for all Minneapolis workers and their families.
  • The City recognizes that income inequality, particularly between white and non-white workers, is one of those most pressing economic and social issues facing Minneapolis

Although reports on the negative effects of increasing the minimum wage in Seattle were announced earlier this week, they haven’t yet been peer-reviewed by scholars and have been criticized for their methodology, as one of them didn’t include large businesses in their data.

A few members of the council acknowledged throughout the proceedings that it would be impossible to please everyone (most in the room were there to advocate for $15 right now), the council chambers erupted into claps and cheers when the ordinance was officially passed.

For more details about the minimum wage ordinance and its legislative journey, visit the City of Minneapolis’ website to review its petition to amend the city charter.

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