Mpls. City Council should reject $15 minimum wage proposal

There are a number of reasons why the Minneapolis City Council should stand in the way of a ballot initiative that would make the minimum wage in Minneapolis one of the highest in the country.

For starters, the council should heed the advice of City Attorney Susan Segal, who issued a clear-cut opinion last week arguing that the $15 minimum wage measure does not fit the definition of a charter amendment. A wage mandate, she wrote, "does not in any way relate to the form, structure or distribution of powers within the municipal enterprise."

In other words, Segal wrote, it's "an ordinance disguised as a charter amendment," and as such the council should not allow it to be placed on the ballot. The council is scheduled to vote Friday. On Wednesday, a council committee recommended that the measure be rejected and that the council take up a minimum wage hike of unspecified size in 2017. If the initiative is defeated as expected, advocates for the $15 wage have vowed to take the city to court.

Segal's opinion cited a 2005 case in which the Minnesota Court of Appeals upheld the council's rejection of a petition to amend the city charter to allow the use of medical marijuana. As that case showed, the charter outlines the basic functions of city government; it's not a tool that citizens can use to pass city ordinances. That's the job of the elected council.

The special-interest advocates for the charter amendment — including the groups 15 Now, Centro de Trabajadores Unidos en Lucha and Neighborhoods Organizing for Change — point to the growing list of cities that have passed phased-in $15 minimum wage increases. It's not clear how advocates arrived at the $15 figure or why it's being used in city after city even though regional economies are as varied as their climates.

On Aug. 1, Minnesota's minimum wage rose to $9.50 an hour for large employers and $7.75 for smaller employers. The proposed charter amendment would raise the city minimum in stages, hitting $15 in 2020 for businesses with more than 500 employees and in 2022 for smaller employers.

Not surprisingly, business interests oppose the effort, both because they believe it's a misuse of the city's charter and because of the impact on the cost structure of city businesses. Although economists have mixed views on the damage done to employment, most acknowledge that at a certain level, higher minimums lead to fewer jobs for unskilled workers — the same people the advocates in Minneapolis are trying to help.

How high is too high? In a Forbes commentary last month, George Mason University economist Adam Millsap argued that a $15 minimum is likely to do more damage in Minneapolis than it would in higher-wage cities such as Washington, D.C., Los Angeles and Seattle — all of which have boosted minimum wages in recent years.

Millsap referred to a Brookings Institution study that argues minimum wages should be set at 50 percent of a community's median wage. If wages in Minneapolis continue to grow at the same pace they are today, Millsap wrote, in 2020 a $15 minimum would be 86 percent of the median wage for workers 16 and older and 69 percent of the median for those older than 25.

Mayor Betsy Hodges, who favors a higher statewide or a federal minimum, has made another important point: Minneapolis should not become a high-wage island in Minnesota and the Upper Midwest. Hodges also has said she wants to see the results of an economic impact study on higher wages that is due in September.

The groups backing the $15 minimum are well-intentioned, and this page shares the hope that more can be done to help low-income residents throughout Minnesota without destroying jobs in the process. But Segal's opinion should make the ballot initiative a nonstarter with the full council on Friday.