$15 an hour could mean fewer jobs for youth

Some businesses, leaders advocate tiered-wage structure

Fifteen-year-old Will Berlin works the cash register at Settergren Ace Hardware in Linden Hills. Businesses in Minneapolis are mulling over how a $15 minimum wage would affect their ability to hire youth workers. Photo by Nate Gotlieb

Jon Olson said he enjoyed hiring young people and working with them at his Dairy Queen in North Minneapolis, which he owned for more than 20 years.

He said it would have been hard to imagine paying his youngest employees $15 an hour, the minimum wage advocates are pushing for as city staff develop a proposal expected to reach the City Council later this spring.

Olson, a Minneapolis Park and Recreation Board commissioner, mostly hired kids who were 16 years old but would hire some as young as 14. It was difficult to expect kids that young to be “a really solid, productive employee,” he said.

“Part of the deal was teaching these young folks,” he said. “When you’re paying 15 an hour, you have an expectation that they’ll be able to do pretty much everything (you’ve) asked.”

Across Minneapolis, employers say a $15 minimum wage would limit their ability to hire teenagers and provide them with the valuable experience that comes with holding a job. Some say the $15 minimum wage would force them to cut back on hiring teenagers, and some are advocating for a tiered-wage system that would allow them to pay youth workers a smaller wage.

Dick Henke, owner of The Malt Shop in Lynnhurst, said he wasn’t sure how many positions his restaurant would be able to maintain if it had to start youth workers at $15. Restaurants are one of the big industries that provide high school kids with their first jobs, he said, calling it something that’s “an important part of what we do.”

“If we had to pay $15 for kids that are learning their first job in their life, I’m not sure we’d be able to keep doing that,” he said. “… If the city follows through, it’s going to be very challenging for sure.”

Good market for teens

The minimum wage discussion is happening in a robust job market, one in which teen labor force participation is picking up, said Oriane Casale, assistant director of the Labor Market Information Office at the Minnesota Department of Employment and Economic Development.

Casale said teen labor force participation is back up to 50 percent in Minnesota, although the number appears to be slightly lower in Minneapolis, according to U.S. Census Bureau data. She said the statewide minimum wage increase does not seem to have had an overall impact on employers’ willingness to hire.

Minnesota increased its minimum wage from $6.15 an hour in 2014 to $9.50 an hour and $7.75 for youth this past year, a rate that will adjust with inflation beginning in 2018.

Casale said the stakes are a little bit different in Minneapolis, however, because employers can move.

In Seattle, which instituted a $15 minimum wage in 2015, the immediate impact has been a major increase in youth unemployment, according to Danielle Grant, CEO of Achieve Minneapolis, which runs the Step-Up Achieve internship program. She said she thinks there would be a negative impact on professional-internship programs such as Step-Up Achieve, adding that her organization would have a difficult time getting students to do professional-level internships if fast food restaurants paid more.

Step-Up Achieve serves as a workforce talent-development system, Director Jeremiah Brown said, something that is crucial to businesses and to having a “thriving and dynamic Twin Cities area.”

A lot of employers value the opportunity to mentor, Brown said, and businesses also love that the young people are diverse and bring fresh perspectives. Plus, Step-Up interns are prepared to get real work done.

“They’re kind of a low-cost solution for businesses to really advance big projects,” he said. “Our young people are skilled enough and prepared enough to contribute every summer.”

Collective punishment

Julene Lind, owner of Nicollet Ace Hardware, said she always thought it was her responsibility to hire youth. They have a real job at her store and are a real part of her team, she said.

Lind has hired as many as four high school kids for the summer but isn’t hiring any this year because of her the assumption there will be a proposed ordinance requiring her to pay youth $15 an hour.

She said there’s no way to hire someone that has zero skills and pay them $15 an hour.

“They have no idea how a business works,” Lind said of the city. “They can’t just go after fast food, so they punished all of us. … We’re not in the same pool.”

At the North Minneapolis nonprofit Cookie Cart, which provides high school students with a job and training in areas such as fiscal literacy and leadership, a $1 increase in minimum wage would cost about $32,000, according to Executive Director Matt Halley.

He said a lot of the teenagers who work for the organization don’t even know they can go to a bank to cash a check. The organization has a lot of kids who are helping out with their families’ basic needs, but Halley said they encourage kids to be able to buy things for themselves, too.

Halley said minimum wage is just one piece of Minneapolis’ economic disparities. He said it’s really hard for a young person in North Minneapolis to get to a place that is hiring.

“If the jobs aren’t available, if their parents are working really hard and are barely able to make ends meet, the whole prospects for them being able to go to college are really small,” he said.

At the Minneapolis Park and Recreation Board, which hires youth for seasonal and part-time jobs, a $15 minimum wage would mean $3.3 million in increased costs in 2018, according to Superintendent Jayne Miller.

Miller said it’s difficult to pull out the impact that would have on youth, since the Park Board hires them for a variety of positions. She said her organization will continue to talk to the Mayor and City Council about how it would cover the expenses.

Miller said the Park Board is very supportive of people making a living wage but noted that many jobs are seasonal and “high school” jobs by nature. She said she worries high school kids would get shut out of jobs with a $15 minimum wage.

Joe Sipprell, general manager of Uptown Diner, said his jobs for teens don’t require a lot of hours; the teens mainly work peak times such as weekends when he needs hosts and bussing help.

He said the jobs are a great for young people learn responsibility, adding that they get to make a few bucks, the servers tip them out and they get an employee meal. He said he pays them $8 an hour and $9.50 when they turn 18.

Sipprell said it would be hard to put an adult in those sorts of jobs. He said he assumes there would be some sort of youth waiver for the $15 minimum wage; otherwise it would be hard to want teens to stick around after their 18th birthday, he said.

Worth $15 an hour?

Nicholas Rocque, an 11th-grader at The FAIR School, works for Delaware North, which supplies food and support services to Target Field. He usually works on the weekends in the school year and works every day once the summer hits, usually from 4 p.m. to 10 p.m. or 11 p.m.

Rocque helps his dad with paying bills and pays his own phone bill. He also spends money on studio time for his music, buying equipment for himself and trying to buy plane tickets to go to shows in other states.

Rocque, who makes about $12.30 an hour, said a minimum-wage increase wouldn’t mean that much to him, though he’d be worried about taxes increasing. He said he understands a $15 minimum wage would help people “in the sense of getting a more stable living situation, but at the same time,” he said, “I don’t think a lot of people deserve it, at least at my job.”

FAIR School 11th-grader Elizabeth Holcomb also worked for Delaware North, cooking burgers at baseball games. She said her family is pretty secure with money but she knows a lot of people aren’t and that raising the minimum wage could really help.

Shaunassey Johnson, also an 11th-grader at FAIR School, said she thinks a $15 minimum wage would be really helpful. Johnson lives with her mom and grandma and works at a Caribou Coffee downtown. She said that with a $15 minimum wage, she could start giving money to her mom, save some and “do more with my money than I can do right now.”

Alexis Flynn, an 11th-grader at Armstrong High School in Robbinsdale who works at Cookie Cart, said she fees like work ethic would go down with a $15 minimum wage. She said she hasn’t furthered her education to the point where she should be getting $15 an hour, adding that she feels her current wage, $10.50, is reasonable for what she does.

“If we’re getting paid right off the bat $15 an hour, what would college do for you?” she asked.

Olson, the Park Board commissioner and former Dairy Queen owner, said he hopes there’s a way to protect employment opportunities for young people. He said he’s happy that conversations are taking place and that people on all sides are trying to figure out “fair and equitable solutions.” But it’s going to take time, he said, and it’s going to mean stretching resources.

“We have to find a balance, too, rather than just saying, ‘we’re going to raise your taxes,'” he said. “If we’re just turning around and taxing people more, it doesn’t help them.”