Council outlines $15 minimum wage ordinance

Public hearings and a vote are scheduled for June

The City Council on May 26 outlined the essentials of the minimum wage ordinance they plan to debate and vote on next month, including a target of $15 an hour and no exceptions for tipped workers.

On a unanimous vote, the Council directed staff to draft a municipal minimum wage ordinance that will also include tiered phase-in of higher wages, with the largest businesses required to pay the new minimum wage within four years of the ordinance’s passage. Once the municipal minimum wage reaches $15 an hour, future increases will be indexed to inflation. The ordinance will also allow employers to pay workers aged 20 or younger a lower training wage during their first 90 days on the job.

The vote came about nine months after the Minnesota Supreme Court blocked an attempt to place a $15 minimum wage city charter amendment on the November ballot. The city argued in court that it was an inappropriate topic for the charter and needed to be handled in ordinance.

Now, the Council is only about one month away from a vote on that ordinance, and members on May 26 credited community advocates with bringing them this far.

“When we started this a few years ago, it was workers who led the way,” Ward 10 City Council Member Lisa Bender said, adding that she was “so grateful” for their efforts.

According to the timeline laid out by City Council Vice President Elizabeth Glidden (Ward 8) before the vote, the draft minimum wage ordinance will be presented for the first time June 6. A public hearing on the ordinance is scheduled June 22, and a final meeting is scheduled for June 28. Glidden said they will “likely be making further adjustments and amendments to the ordinance” before a vote at that meeting.

The Council also voted to approve two other staff directions that may or may not be wrapped into the municipal minimum wage ordinance: one requiring a regular review of the minimum wage ordinance’s impact on the local economy, including tax receipts, wages and the unemployment rate; and another requesting staff to identify ways to support business, particularly small businesses, during the transition.

Glidden, who introduced the motion directing staff to draft an ordinance, said she purposely left the most flexibility around the question of the tiered phase-in period, which she views as critical. Motions by Council members Cam Gordon (Ward 2) and Jacob Frey (Ward 3) narrowed the range of options to a maximum phase-in period of four years for large businesses and no more three business-size tiers.

The Council can expect pushback on the issue of an exception for tipped employees. Both restaurant owners and many who work in the service industry have been calling for a tip credit that would allow employers to count tips toward wages.

The plan supported by Pathway to $15, representing the local restaurant industry, and Service Industry Staff for Change, made up of restaurant servers and bartenders, would also require employers to make up the difference if an employee’s wages plus tips don’t equal at least $15 during a shift.

The youth training wage was included in response to another concern voiced by both business owners and some nonprofits, who argued that local employers would be less likely to hire teens or take on interns if they were required to pay them $15 an hour.

Glidden said members of the Council had coalesced around the $15 minimum wage in recent months because the public was “demanding” a change.

“That is just speaking to what has been happening to our economy that is so damaging to everyday people,” she said. “Wage stagnation is real and it has a real cost.”

Mayor Betsy Hodges, who over the winter embraced a $15 minimum wage with no exception for tipped workers, reminded local business owners that “the conversation is not over” yet, and that they’d still have time to shape the ordinance.

“How we structure it and over what period of time (wages are phased-in) can make a big difference for the businesses in the City of Minneapolis,” Hodges said.

The outline of municipal minimum wage ordinance presented May 26 stuck closely to the recommendations included in a staff report delivered to the Council earlier in the week. That report recommended setting the minimum wage at between $12.49 and $15 with no exceptions for tipped workers and a tiered phase-in.

The report was prepared after several months of public engagement, including 16 listening session attended by about 450 people, 1,759 survey responses and 115 comments submitted via email. The report also considers the input of the Minneapolis Workplace Advisory Committee, whose appointed members advise city leaders on workplace policy, and a growing body of research on municipal minimum wage ordinances.

That body of research includes a study of the effects of raising the local minimum wage to either $12 or $15 that was delivered to the City Council last year by researchers at the Roy Wilkins Center at the University of Minnesota. That study predicted black and Latino workers, in particular, would benefit from a higher minimum wage, because they are overrepresented in low-wage jobs. The study also predicted a minimal loss of jobs after higher wages take effect.