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ND Dems propose hike in minimum wage

Evan Dosch, right, asks the two guests Parker Hoey, left, and Tom George if they need anything with their pizza at Rhombus Guys Pizza in Grand Forks, ND on Tuesday, January 10, 2017. (Joshua Komer / Grand Forks Herald)1 / 3
Evan Dosch, a Student at UND smiles for a portrait before serving the pie to a customer at Rhombus Guys pizza in Grand Forks, ND on Tuesday, January 10, 2017. (Joshua Komer / Grand Forks Herald)2 / 3
Evan Dosch mixes up a drink at the second floor bar at Rhombus Guys Pizza in Grand Forks, ND on Tuesday, January 10, 2017. (Joshua Komer / Grand Forks Herald)3 / 3

When Rhombus Guys co-owner Arron Hendricks was hiring kitchen staff, he started off paying some workers minimum wage, but he soon noticed an issue. He wasn't getting any good help. If he did, they wouldn't stick around. So, he decided to boost wages for those positions.

"It didn't take the state stepping in to do that," Hendricks said.

On Monday, a pair of Democratic lawmakers introduced legislation to do just that. The bill would raise North Dakota's minimum wage in an effort to boost earnings for the state's low-income earners, but the head of the state's most prominent business group predicted the bill won't get far.

Rep. Marvin Nelson, D-Rolla, wants to bump the state's minimum wage from $7.25 an hour to $9.25 an hour by the beginning of 2018. The legislation also directs the labor commissioner to adjust the wage to account for cost-of-living increases on Jan. 1, 2019, and every year after that date.

The legislation also would prevent the labor commissioner from decreasing the minimum wage.

Nelson, the Democratic candidate for governor in last year's election, said the legislation would have more impact in North Dakota's rural areas. He said many people are "running really hard" by often working more than one job but still failing to keep up.

"We're a state where rent is relatively high relative to wages," Nelson said.

The legislation is co-sponsored by Rep. Mary Schneider, D-Fargo.

In Grand Forks, experts say there are not a large number of minimum wage jobs.

"We're seeing big-box retailers offer $10 to $12 per hour to start now," said Keith Reitmeier, Grand Forks manager for Job Service North Dakota.

Reitmeier said he doesn't see many minimum wage jobs show up in postings inside Grand Forks County.

The county ranked 20th among North Dakota counties in average wages in 2015, according to data from the state Department of Labor. The average annual wage in Grand Forks County was $43,058 in 2015, well below the state average of $50,696.

Government employees in Grand Forks County averaged higher wages than private employees with an average of $51,238 compared with $40,970. Statewide, private employees averaged higher wages.

Local impact

Area Chamber of Commerce President Barry Wilfahrt told the Herald on Monday he believes a raise in the minimum wage would have a negative impact locally. He said it would be bad for the more than 200 nonprofit organizations in Grand Forks.

"That would put a lot of burden on nonprofits," he said.

Wilfahrt believes raising the minimum wage also would harm local businesses who hire interns or college students.

He said the bill is more about political rhetoric and not a reflection of reality in Grand Forks. Rural communities have more minimum wage jobs, Wilfahrt said, and he argued raising the minimum wage would put a greater strain on small businesses.

Hendricks said he didn't think raising the minimum wage would have a positive effect on Rhombus Guys either. Instead, he said, it likely would have a negative impact or none at all. The market should be allowed to work itself out, he said.

Skills training

Andy Peterson, president and CEO of the Greater North Dakota Chamber, said he doesn't think the bill "would have a great chance of passing," given the Legislature's makeup. Republicans currently hold supermajorities in both chambers.

Peterson argued for more skills training to help workers rather than mandating employers pay a minimum wage. He warned raising the wage could encourage employers to look at automation.

"The better approach in our mind is to instill skills in your workers so that they can find better-paying jobs when they're ready to move on," Peterson said.

North Dakota's $7.25 minimum wage mirrors the federal standard, but a number of states and municipalities have seen efforts to raise pay in recent years. All of North Dakota's neighboring states have a minimum wage that's higher than the federal mandate, the highest being $9.50 an hour for large employers in Minnesota, according to the U.S. Department of Labor.

North Dakota's minimum wage went to $7.25 an hour in July 2009, according to state law.

House Bill 1263 was referred to the House Industry Business and Labor Committee, but a hearing has not yet been scheduled.