Editorial: Misguided and counterproductive mandates in St. Paul

Tuesday, September 20, 2016

St. Paul’s misguided workplace mandates ultimately will hurt people their supporters aim to help.

The city’s new sick- and safe-time requirement and looming $15 minimum wage discussion are at odds with the drive to attract jobs and address racial disparities that Mayor Chris Coleman and city council members claim to embrace. By making it more difficult to start and grow a business, this regulation will worsen the divide between the haves and the have-nots.

Minnesota experts have analyzed the state’s economic and educational disparities at length. Continued evidence of disparity arrived just last week:

Black or African American joblessness in Minnesota is 8 percent, according to August data from the state’s Department of Employment and Economic Development, down from a year earlier but still nearly three times the white unemployment rate of 2.9 percent. Those rates don’t count people who have given up looking for work.

And, according to a MinnPost analysis, while minority groups represent about 22 percent of the metro area’s population, businesses they own account there for just 7 percent of all employer firms.

In the face of such disparities, our lawmakers are simply making matters worse.

While we should be clearing the way for entrepreneurship and business growth, and the freedom they deliver, we’re instead deterring employment, raising barriers to entry, making it more expensive and difficult to start and grow a business here.

There’s evidence from other cities. The hospitality industry has tracked the cumulative impact of such policy changes in other states, explains Dan McElroy, executive vice president of the Minnesota Restaurant Association and the Minnesota Lodging Association. Prime examples are in Washington and Oregon.

Based on the number of eating-and-drinking establishments and the number employed, they had about 19 workers per location, up until a few years ago, McElroy explains. (Minnesota now has about the same level of workers per location.)

As costs increased, employment declined to about 14.5 workers per location. “Restaurants don’t go away, but they change,” he said, offering less table service, less “scratch cooking” and higher prices.

We’ll see how that plays out in St. Paul, and what the landscape looks like with a patchwork of regulations that differ from city to city.

Some businesses will do fine, but others will shrink, leave or fail.

Businesses are not stupid. They get that, whatever the slogans, the attitude in St. Paul is not-so-open about business. Sure, the city council is going to have listening sessions, and members will be very public about loosening regulations. And of course the business community will have a voice. Sort of like the voice it had in creating the sick-leave regulation.

People who run businesses will take this in any number of ways:

  • insulted that they are being fed “open for business” propaganda
  • used, in the sense that they were put through public-review sessions for show
  • frightened that now they may not be able to make ends meet
  • tickled pink because their business can survive this regulation, but competitors real and potential can’t.

The city council tried to kick the can to the Legislature last week, with six of seven members signing on to a resolution calling on the state to set uniform rules for mandatory paid sick- and safe-time. As businesses begin to leave St. Paul for friendlier confines, such a law would help slow the exodus.

Meanwhile, the Minnesota Chamber of Commerce is among advocates of a better approach: pre-emptive legislation that would prevent local governments from enacting harmful wage-and-benefit mandates altogether.

Clearly, the Minnesota Chamber is more focused on full employment than our city council, despite the mayor’s promise of thousands more jobs in St. Paul.

No surprise there. Employers want to employ people. Politicians want to slow them down.

Which will only worsen the divide between the haves and have-nots.

This article originally appeared in the St. Paul Pioneer Press. To view the original article, please click here