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MRA Report: Efforts Underway to Influence Minimum Wage Discussion

I know it’s February already, but this is the first column of 2017, so Happy New Year! The legislative session is usually the first thing on my mind for the first column, but not this year.  

The prospect of a $15 minimum wage in Minneapolis has garnered significant media attention and has been a topic in this column several times. Needless to say, it is a major concern for many in the industry. Mayor Betsy Hodges recently changed her position from opposing a city-only wage to being an enthusiastic supporter. Why? Politics, of course! 

The mayor and the 13 members of the Minneapolis City Council all describe themselves as progressives and they are all up for re-election this year. Many of them are facing challenges for their party’s endorsement from candidates who are even more progressive and criticize the incumbents for not being progressive enough.

A steering committee of Minnesota Restaurant Association members has been working on a plan for responding to the $15 Now advocates and to protect the interests of our diverse industry in Minneapolis. The steering committee’s thinking is shaped by these facts: 1) With a very liberal mayor and city council and a strong advocacy movement working for a $15 wage, a campaign based on “just say no” isn’t likely to be successful. 2) The Minnesota Restaurant Association needs to be part of a larger industry coalition including MRA members, non-members and those with related interests.

The strategy that was adopted by the MRA board is called “A Pathway to $15,” and is based on the fact that none of the efforts in cities across the country where the industry urged a city council or the voters to say no have been successful. Our approach is to say, “yes, but the details are really important.” We want our employees to be paid well, but there are clear realities in the economics of the industry. Having a city-only wage that wouldn’t apply in neighboring suburbs or other cities makes the issue even more complicated.

The Pathway to $15 proposal is to support an ordinance that recognizes the complexity of the hospitality industry and of this issue by including these provisions:

A wage of $9.50 an hour for tipped employees who earn $15 or more per hour with their wage and their tips.

A wage of $7.75 an hour for workers under 18 years of age. 

A series of wage increases for other workers to reach $15 in 2022 and apply uniformly to independent and franchised restaurants.

We are building a Pathway to $15 coalition and have engaged the Lockridge Grindal Nauen firm to help us with lobbying, grassroots engagement, public relations and other aspects of a bold and comprehensive campaign. There is more information about our efforts at www.Pathwayto15.org. A schedule of meetings with city council members and the mayor is on the Pathway site. There is a chance the state legislature will preempt the authority of cities or counties to enact a local wage of benefit mandates. This issue is so important, however, that the MRA board decided that we need to fight on two fronts, both at city hall and at the state capitol. We need support and help from the entire industry. If you have questions, contact me (Dan McElroy) at 651-925-4011 or dan@hospitalitymn.com.

Now we can write about what is happening at the capitol. The legislature started its session a few weeks ago and is well underway. The big picture issues for the session are passing a state budget, a tax bill that includes relief, and a transportation funding package. However, there are some specific issues that affect our industry. The MRA board adopted its top priorities at a January meeting:

Ensure uniform state labor standards in Minnesota and maintain the principle of “one state—one rule.” We support legislation that preempts the authority of local governments to establish local minimum wages and employee benefits;

Recognize the value of tips and improve the equity between tipped and non-tipped employees by removing the inflation factor from the minimum wage of tipped workers who earn $12 an hour or more with their wage and tips;

ADA legal actions: Support strong legislation that allows access for the disabled, but reduces the risk of predatory lawsuits;

Exempt restaurant equipment, employee meals and comps from the sales tax;

Vendor collection allowance: Allow businesses that remit taxes on time to keep 1% to 2% to cover part of the cost of collection;

Phase out the statewide business property tax;

Support a state tax credit for employers who offer short-term disability insurance.

The board also chose three issues as lower priority proposals that the MRA favors:

Support a restricted driving credential for immigrant workers who are undocumented. This is the Business Immigration Coalition position;

Support a state income tax credit for ready-to-eat food donations;

Support a utility sales tax reduction for restaurants that parallels the reduction for other manufacturers.

There are detailed issue briefs on our website for each of these topics under government affairs at www.mnrestaurant.org. Other issues will inevitably come up during the session that impact our industry. During a typical session there are more than 2,000 bills introduced, but only a small number of those get serious consideration or become law. As I write every year, I am deeply grateful that our state constitution requires adjournment by the third Monday in May, which this year is May 22. Our next column will provide an update on the happenings under the newly renovated capitol dome. 

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