A New Year, A New Wage

Our fresh local government should take a fresh look at the minimum wage.

Punch Pizza in Minneapolis

It’s 2014, and I thought I should write an open letter to our honorable mayors Betsy Hodges (new job, never met her) and Chris Coleman (still my favorite mayor in America), our city councils, our representatives, our senators, and Governor Dayton, too. I’m concerned about pay for food workers. I think the Twin Cities can become a national leader in the fight to raise the minimum standards for pay in the food service industry. And we can do it by raising the minimum wage which is currently $6.15 for large employers and $5.25 for small employers in Minnesota.

Today, 52 percent of families of fast-food workers are forced to rely on public assistance programs to make ends meet for food, rent, and health care. That’s DOUBLE the percentage of jobs in all other economic sectors. You see, only 13 percent of these food workers get health insurance through work, compared to 59 percent of other working Americans. That costs us almost $7 billion a year. Jobs in corporate fast-food sectors simply don’t offer living wages, even at full time, which is defined as 40 hours per week. About 67 percent of front-line fast-food workers are older than 20; these aren’t high schoolers. Almost 68 percent are primary earners in their families, and more than 25 percent are raising children. Spending on Medicaid and the Children’s Health Insurance Program for fast-food workers’ families is almost $4 billion nationally. Hourly wages average $16.57 nationally but are only $8.69 for fast-food workers. I asked five friends today to fill in this blank: 73 percent of fast-food workers are _______. They all guessed ethnicities. The answer is women. Wanna make a difference for women in America? Raise the minimum wage.

And why is it so important, now more than ever? Well, about two of every five jobs that were created in post-recession America have been in low-paying sectors like food service. Half the jobs lost during the same recession were in industries paying in the range of $38K–$68K yearly.

This shift is specifically why Robert Reich, the Clinton administration labor secretary, said, “It’s impossible for the economy to run on all four cylinders unless consumers have enough purchasing power to keep the economy going.’’ Health reform is crucial, and so is growing the food stamp program, but in my opinion the best way to keep up growth here in Minnesota would be to create a more robust statewide minimum wage.

As Paul Krugman pointed out in a New York Times column from last November, “When it comes to the minimum wage . . .

we have a number of cases in which a state raised its own minimum wage while a neighboring state did not. If there were anything to the notion that minimum wage increases have big negative effects on employment, that result should show up in state-to-state comparisons. It doesn’t.”

Raising the minimum wage to $10 an hour would benefit hundreds of thousands of Minnesotans. Back in December, Punch Pizza increased its starting wage to $10 an hour, raising the pay of more than 80 percent of its employees. Punch now offers the highest wages in the local quick-service restaurant market. According to co-owner John Puckett, investing in employees, while expensive ($3 million over the next 10 years), ensures Punch’s place as the “employer of choice for people seeking a career in the restaurant business and for nice people that want a flexible and interesting job.” Yes, he said career. Ask front-line fast-food workers if they have a future in their company, and they will say no. It’s a dead-end low-paying job.

Punch is raising its starting hourly wage to $10, paying pizza cooks from $12 an hour with bonuses, offering six-figure salaries for top-tier GMs, and starting new managers off at $50,000 a year. Puckett and his partner John Soranno are also launching Punch University, a pizza cook and management training facility. This is a big statement about creating an environment for success, and clearly, with eight stores and nearly 250 employees, Punch has done well since opening its first shop in 1996 in Highland Park. I think what’s driving this decision is good business and good works, in that order, and our local governments can take a cue from them and help us lead on this issue on a national level.

I live in Minneapolis, where our city council just got a lot younger and a lot more diverse. We just got a new mayor. There’s no better time to come out for a minimum wage hike than in the first few months on the job. St. Paul’s Mayor Coleman is already a national voice for progressive leadership. Raising the minimum wage here in Minnesota can start with the leaders in our largest cities calling for our governor and our statehouse to make economic equality a reality in 2014.