North Dakota’s minimum wage is too low. At $7.25 per hour, that rate comes to $15,080 annually. It’s not a liveable wage.
As we have said before, the state’s base rate should be increased, but it should come in steady and financially manageable increments – not as an all-at-once movement or as a mandate determined by ballot.
Now here’s an addendum to our aforementioned belief: Large increases especially must be avoided during times of crisis, such as the current economic mess brought on by the coronavirus pandemic.
An example is in Connecticut, where low-wage workers are getting a $1-per-hour raise this week, bringing the minimum wage to $12. It comes after the Connecticut Legislature last year passed a bill to increase the state’s minimum wage from $10.10 to $15 over the course of three years.
And, predictably, businesses in that state already are reacting. According to a news report in the Hartford Courant, the owner of a Connecticut cafe already is adding 50 cents to the price of hamburgers and other entrees. This is a real reaction that so many backers of minimum wage increases don’t mention.
Now add the stress that is bound to come to many businesses as they struggle to get through the pandemic, which has brought historic disruption to commerce and, correspondingly, has caused countless business closures nationwide.
Eighteen states (including Washington, D.C.) have pushed their minimum wage to $10 or more; Minnesota’s minimum wage is $10 for larger businesses, $8.21 for smaller businesses.
Minnesota has attached caveats to its statewide pay scale. For example, there is an $8.15-per-hour training wage, which may be paid to employees younger than 20 for the first 90 days of their employment. Also, the state has allowed for a youth minimum wage: $8.15 per hour for employees younger than 18.
The cities of Minneapolis and St. Paul have chosen to increase minimum wages to $15 over the course of the next few years. That can’t happen in North Dakota, where a law was passed disallowing cities from mandating their own minimum wage rates.
Minnesota’s method is sound – small increases, and with various rules that keep the rate lower among children and trainees.
North Dakota, where pre-pandemic unemployment was historically low, hasn’t necessarily needed a higher minimum wage, since competition for workers already has brought up the pay for most low-paying jobs. A free-market approach is best, but it shouldn’t dissuade lawmakers from modest and occasional increases to the state minimum wage.
North Dakota’s Legislature should consider a plan to responsibly raise the rates in the coming years, getting ahead of any movement that comes from outside the purview and considerations of our elected leaders. The rate shouldn’t be $15 – not even close. It also shouldn’t be the $7.25 that it is today.
But to give the minimum wage a sizable boost anytime during the pandemic or amid the economic uncertainty in the months after the pandemic subsides?