Rep. Andrea Kieffer: Good Wages Come from Good Opportunities

Column by Rep. Andrea Kieffer (R-Woodbury)

The Minnesota House Committee on Living Wage Jobs has been holding a series of meetings around the state, most recently in Moorhead.

Rep. Ryan Winkler (D-Golden Valley) is the chair of the group and actively promotes his agenda: to gain public support for a significant increase in the state's minimum wage.

As a member of this committee, I take serious issue with some of the information presented by Rep. Winkler during recent meetings.

Winkler’s presentation incorrectly implies that his proposal for raising the wage is bipartisan. Also, using the term “living wage” as a vehicle to discuss changing the minimum wage is disingenuous. Minimum wage was never intended to be a “living wage.”

I find it concerning that this committee chair is wasting time and taxpayer dollars on a one-sided message.

Similar to the nearly $2.5 billion in new taxes and fees passed by Democrats this year, a dangerously large increase to the minimum wage will not cure the need for well-paying jobs that enable Minnesotans to make better lives for their children.

Currently, Minnesota faces a serious skills gap—a problem where the education and work history of those looking for work does not match the skills desired by employers who have abundant openings.

The National Association of Manufacturers believes the most pressing issue facing its members is “the mounting skills gap between the preparedness of workers, the capabilities manufacturers need, and the scarcity of graduates in the science, technology, engineering and mathematics fields.”

Researchers from Miami University and Trinity University found that, for younger, low-skilled workers, significant increases in the minimum wage could drastically decrease employment opportunities. Under the $9.50 plan, employment opportunities for young workers could fall by 10 percent. This furthers the skills gap because it hurts the ability of these people to gain much needed work experience.

This should come as no surprise to lawmakers. We heard from nonprofits that employ teens in part-time or summer jobs, such as the Conservation Corps, that raising the minimum wage would cut the number of jobs available for teens. Many nonprofits operate on fixed budgets each year. Increasing their labor costs requires more money from the government or private donors that may not exist.

If the minimum wage is increased to $9.50, a 10-week summer program that employs a young person for 20 hours per week will see costs increase by $450 per teenager.

Furthermore, for every dollar increase in wages, the additional costs to employers include worker’s compensation, unemployment insurance, and new ACA mandates. The strain on the balance sheet will ultimately drive business decisions to reduce available positions for hire: exactly what we don’t want.

Unfortunately, you will not find this balanced discussion from the Democrats’ Living Wage Committee. Nor will you find discussion of the negative impacts from the ill-conceived equipment repair sales tax, warehouse tax, and other new tax and fee hikes that are adding to the burden of Minnesotans all over the state.

On minimum wage, a 2012 report from the Department of Labor and Industry (DLI) calls into question some of Winkler’s assertions. Almost 60 percent of minimum wage earners are under 24 and almost 30 percent make overtime, tips or commission on top of their hourly wage. Over 60 percent of minimum wage workers work in the retail or restaurant industries.

In St. Paul and around the state, lawmakers have heard from independent retail businesses and restaurants that the drastic minimum wage increase would hurt them. Their only options would be to raise prices, reduce hours, or lay off workers.

Winkler does not seem to understand that when small businesses hurt, employees hurt as well.

In 2010, the Itasca Project warned that Minnesota is already an outlier with wage demands, making the state a less business-friendly place to grow. Winkler’s plan for minimum wage will put Minnesota near the top in the nation and 31 percent higher than all of our neighboring states.

Combining the higher wage with more regulation and new wage mandates is a recipe for disaster. If Democrats think employers—especially near the borders—won't make adjustments to their business model, they are kidding themselves.

—Respectfully, Andrea Kieffer

She can be reached at 651-296-1147 or rep.andrea.kieffer@house.mn.

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