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Austin mayor comes out in favor of raising minimum wage

Published 9:38am Wednesday, February 12, 2014

AUSTIN — The mayor of Austin made it clear Monday he is onboard with efforts to raise Minnesota’s minimum wage to $9.50 by 2015.

Mayor Tom Stiehm met with Minnesota 2020’s Joe Sheeran Tuesday morning, who is also a supporter of the Raise the Wage coalition pushing for $9.50 by 2015. Researchers with the coalition have used statistics based off of the U.S. Census Bureau’s American Communities Survey and say a $9.50 minimum wage would provide a raise for 357,000 Minnesotans. Locally, it would mean a raise for about 1,800 people in Austin and 1,300 in Albert Lea.

Stiehm is one of about a dozen Minnesota mayors to join the push. Duluth’s mayor was the first to join the effort.

Sheeran, on behalf of the Raise the Wage coalition, has been touring the state since last Thursday and gathering support from mayors and various City Council members. Sheeran and the coalition argue that minimum wage has not kept rate with inflation, and would by some experts’ research be even more than $9.50 if it had.

“It would be well over $10; some economists and economic experts have it as high as $10.70, so the market here hasn’t worked out here for workers,” Sheeran said. “It hasn’t worked out for businesses because people haven’t had enough money in their pockets to go shop at those local businesses.”

Stiehm noted the importance of higher wages in Austin because of its relatively high poverty rate, as well.

“Our city stayed right around 5 percent unemployment which is pretty good, but the problem is we have almost 20 percent poverty rate in the city,” he said.

Of course, there has been a lot of talk about minimum wage not being a living wage, and Stiehm agrees $9.50 also wouldn’t reach that level.

“Minimum wage is not a living wage, and I don’t even think the new minimum wage is a wage you could support a family on.”

However, the main opponents of raising the minimum wage, business owners and business advocates, are fearful $9.50 is too much of a jump. They fear businesses, especially small ones, would have to cut employees and raise prices. They wonder what backlash there would be from employees currently earning near or more than $9.50.

“I think people need to be careful about mandating prosperity,” said Sandy Forstner, director of the Austin Area Chamber of Commerce. “Minimum wage, in all these discussions, the conversation seems to switch to a livable wage. I don’t think minimum wage was ever intended to be a livable wage. It’s a starting wage; it’s a floor. It wasn’t designed to provide for a family of four.”

Forstner admitted the state minimum wage needs to rise, but he suggests legislators vote to align it with the federal minimum wage.

“If raising the minimum wage is going to lead to prosperity, why $9.50?” Forstner said. “What’s magical about that? Our position is, here in Minnesota, I think we need to be on a level playing field with businesses across the nation, so matching the federal rate seems to be logical.”

However, Stiehm, like Sheeran, believes pushing Minnesota’s minimum wage up would encourage other states to do so and strengthen the entire economy. Sheeran and the coalition will continue to tour the state and ask for city support in efforts to persuade legislators to increase wages.

Minnesota’s current minimum wage is $6.15 and $5.15 for large and small businesses respectively with $625,000 in sales. The federal minimum wage of $7.25, however, kicks in for many workers. While the House of Representatives has passed its own bill with $9.50 minimum wage, the Senate has scaled back on that measure.