Minimum-wage battle is far from settled in Twin Cities

The four-year hike to a $15 minimum wage in Minneapolis began this month, but the broader discussion and a lot of lobbying is just getting underway.

It was only a few years ago that the custodian union targeted $10 an hour as the wage floor amid the slow job-growth days after the Great Recession. The working stiff sure could make the case for a raise, after a generation of stagnating wages.

Today, the Twin Cities has record-low unemployment. Many employers are offering starting wages at $12, $13, $15-or-more per hour in factories, banks, offices and restaurants for even inexperienced-but-trainable new hires. Employee-hungry employers, from Graco to Target and U.S. Bancorp have effectively established $15 as the new floor for wages.

There are interesting twists to this evolving tale. Here are some of the issues that will surface in coming months:

• In Minneapolis, a Hennepin District Court judge last year declined a business challenge to stop the city from mandating a higher wage than the $9.50 an hour for Minnesota employers of more than $500,000 in revenue. The Minnesota Chamber of Commerce pulled out of the suit. Minneapolis-based Graco continues to remains in the suit.

• Graco, the city's globe-spanning manufacturer, employs hundreds of workers at its Northeast plant on the Mississippi River. It also soon will consider whether to build a new headquarters in Minneapolis or move to one of its other facilities in the northwest suburbs. With its hourly employees, Graco pays all but a couple part-timers at least $15 to $30 an hour, including good benefits and stock that has led to significant wealth for many.

A third of the 750 headquarters and plant workers are minorities.

"Both employees and employers need the flexibility to define what they need in compensation and benefits programs … and allow business to be competitive in their respective markets. A city mandating a minimum wage is a slippery slope … we have no ability to predict what the next mandate will be. Businesses cannot make informed long-term investment decisions in an uncertain environment."

Graco CEO Pat McHale, a machinist as well as an accountant, grew up in Northeast and put himself through college working on a factory floor. New Mayor Jacob Frey might consider a visit. The city's Graco-neighborhood riverfront plant contemplates little beyond parks and beaches.

• At huge U.S. Bancorp, where management last week said it would use some of its savings from the just-passed federal corporate tax cut to raise minimum wage to $15 an hour, there is an organizing effort to raise that wage to $20 an hour.

Adinah Zilton, 25, a Macalester College graduate, makes nearly $20 an hour as an account-set up coordinator at U.S. Bank. She started at Wells Fargo for about $11.50 an hour in 2015. Zilton is part of a national movement, funded largely by the Communications Workers of America, to organize and raise wages at big financial institutions. She struggled as a teller, standing all day. She likes her job at USB.

"We applaud the changes at U.S. Bank," Zilton said. "A $15 per hour starting wage and the $1,000 bonuses will benefit thousands of front-line workers at U.S. Bank, but the raise to $15 is confirmation that we have been underpaid for many years. U.S. Bank management didn't need to wait for a huge tax break that will give them windfall profits in order to do right by their employees.

• At restaurants, the flap over the new minimum wage is hotter than ever. This is a local boom industry, including brewpubs. Frey may need to revisit the decision not to include a "tip credit." St. Paul is considering its own $15 minimum.

Owners at places such as Northbound Smokehouse & Brewpub and Hell's Kitchen said a 20 percent hike in menu prices will not cover downstream wage increases, without a tip credit. That means bartenders and servers who already earn $15, $20 or $25 an hour would get a credit for a percent of their tips.

Jennifer Schellenberg, a bartender and server at Northbound in Minneapolis, hopes to influence St. Paul and get the tip credit retroactively instated in Minneapolis. She is a leader in the national Restaurant Workers of America to "preserve and protect tipping and tip credits."

"We ran through our [financial projections] the other day at Northbound and even with a 20 percent increase in menu prices, we cannot make $15 an hour by 2024 and stay profitable," she said. "I'm for the minimum-wage increase. Most of us fighting for a tip credit are liberals.

"There's tremendous demand for cooks and other back-of-the-house workers. A skilled line cook starts above $15. But the economic consequences when a business has to give a 50 percent raise to the [tipped bartenders and servers] is not good."

They can't be an island or do things that hurt or kill the growing independent restaurants and other businesses.