On Minnesota Governor Vetoing Preemption Bill That Would Have Blocked Local Minimum Wage Laws

In response to Governor Dayton vetoing a law that sought to preempt Minnesota cities from enacting local laws pertaining to the minimum wage, paid sick leave, and other employment benefits, Chris Owens at the National Employment Law Project issued the following statement:

“By vetoing legislation that would have taken away Minnesota cities’ power to raise the minimum wage and guarantee paid sick leave, Governor Dayton has stood up for hard-working Minnesotans and set an example for elected leaders everywhere. With cities taking the lead in setting local wage and benefit standards that meet local residents’ needs, wealthy corporations and their front groups are trying to stop this movement in its tracks. Governors and state legislators are the last line of defense against such attacks. They must decide whether they, like Mark Dayton, will stand with working families, or instead follow the example of Mike Pence and Scott Walker and help corporate lobbyists strip cities of the power to address local needs through local measures. In recent years, approximately 40 U.S. cities have raised the minimum wage, and more than 30 have guaranteed paid sick days. With the path cleared by Governor Dayton’s veto, Minneapolis is expected to enact the first $15 minimum wage law in the Midwest later this year.”

Background:
Republican legislators in Minnesota introduced multiple “preemption” bills this session that would strip cities of the power to enact a local minimum wage law higher than the state’s, as well as earned sick time protections. HF180 would have prohibited localities from enacting minimum wage laws. Companion bills HF 600 and SF 580 would have gone beyond that to arguably prohibit any type of protection in the workplace by barring local minimum wage laws, paid or unpaid leave protections, any laws governing employee scheduling, and any other “benefit” for employees.

The bills were a direct response to earned sick time legislation passed in both Minneapolis and St. Paul and the Minneapolis City Council’s likely adoption of a higher city minimum wage this year. No evidence supports the claim that local minimum wage and earned sick time laws cause economic harm, and significant evidence supports the opposite: such laws make a real, positive difference in workers’ lives.

The preemption proposals follow the playbook corporate lobbyists are using in other states: first blocking any action to protect workers at the state level, and then passing preemption laws to prevent cities from raising the minimum wage or guaranteeing earned sick time at the local level. Twenty-four states have passed laws that block cities from passing their own local minimum wage laws—and 19 more have passed similar bans on local earned sick time laws.

In almost all cases, state efforts to preempt city minimum wage and earned sick time laws have been driven by conservative state legislatures responding to pressure from big business. Taking away local control over wages and employment conditions is a major priority of the American Legislative Exchange Council (ALEC), a corporate-backed group with extensive lobbying resources and influence in our state legislatures. ALEC has drafted “model” preemption bills to prohibit local minimum wage laws since at least 2002. Preempting local minimum wages was a priority agenda item for ALEC in 2016, and the rapidly growing list of states introducing preemption bills in 2017 indicates that minimum wage and earned sick time preemption continues to be a top priority for big business.

Arguments that preemption laws are necessary to preserve “uniformity” and remain “competitive” do not hold up. Proponents of preemption claim they are concerned about creating a “patchwork” of local employment regulations—and that their goal is to ensure uniform state policy. However, backers of preemption laws equally oppose action at the state level to guarantee earned sick time or raise the minimum wage. Their real motivation is to keep workers uniformly unprotected.

Moreover, the experiences of cities and counties, and employers with local minimum wage and earned sick time laws shows that they are manageable for employers. For decades, businesses have been accustomed to dealing with varying local zoning, licensing, tax and regulatory policies.

Similarly, the economic evidence shows that a city or county that adopts a higher local minimum wage does not become less competitive with surrounding areas. One of the most sophisticated studies of minimum wages looked at the impact of minimum wage rates in more than 250 pairs of neighboring counties in the United States that had different minimum wage rates. Comparing neighboring counties on either side of a state line is an especially effective way of isolating the true impact of minimum wage differences, because neighboring counties tend to have similar economic conditions. The study found no difference in job growth rates.

Local power to raise the minimum wage is important for higher-cost communities and allows workers to win raises when political gridlock blocks state action. Local power to raise the minimum wage allows higher-cost-of-living communities in a state to adopt wages that better match their higher housing and living costs. A U.S. Bureau of Labor Statistics analysis found that urban households in 2011 spent 18 percent more than rural households, and higher housing costs by urban consumers “accounted for about two-thirds of the difference in overall spending between urban and rural households.” In the Minneapolis/St. Paul/ Bloomington area, a single worker with one child needed at least $25 per hour working full-time in 2014 to make ends meet. Another key role it plays is providing a means of raising wages when political gridlock prevents the state from acting—for example, when a governor blocks action to raise wages, or when one or both houses of the legislature refuse to act.

Across the country, more than 40 cities or counties in states such as California, New Mexico, Arizona, and Illinois have adopted local minimum wage laws that have successfully helped workers better afford the basics. Local minimum wage laws—which generally impact just a few high-cost communities in a particular state—have proven effective and manageable for businesses.