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A matter of time? Debate begins over proposed $15 minimum wage in ND

Chitra Tamang, left, and Lachi Rai clean a room at Homewood Suites in north Fargo on Friday, March 9, 2018.David Samson / The Forum

FARGO—The general manager of Homewood Suites here feels fortunate to be spared from the turnover bug that commonly affects the hotel industry.

Tom Kasper said many of his 30-member staff are hourly employees, paid in the neighborhood of $10 an hour.

If a move underway in North Dakota to raise the state's minimum wage to $15 an hour passes, he said, it could be tough to absorb.

"Another five dollars in three years, a 50 percent increase, would be a large increase," Kasper said.

Just getting started, the ballot initiative would boost, in phases, the state's current $7.25 hourly minimum wage to $15 by 2021.

A petition was filed with the Secretary of State's office on March 5. If approved, backers will need to collect 13,452 signatures to place the proposal on the November ballot.

Fair Wage Act Chairman Scott Nodland of Bismarck said it boils down to fairness and his belief that everyone deserves to earn a living wage.

"Maybe it's my North Dakota sensibilities that take me to a place where I feel like it's important that we are all lifted up, not just some of us lifted up," Nodland said.

According to the federal Bureau of Labor Statistics, the estimated mean hourly wage in North Dakota was $22.66 in 2016.

At the same time, approximately 1,000 people in the state earned the $7.25 minimum and about 3,000 others made even less.

Carey Fry of Job Service North Dakota in Fargo said few businesses here can get away with paying minimum wage.

"It's hard for an employer to find workers to stick around for $7.25 an hour," Fry said.

Free market

Under the proposal, the minimum wage increases in North Dakota would happen in stages:

• July 24, 2019, raises to $9.83 per hour

• July 24, 2020, raises to $12.41 per hour

• Jan. 1, 2021, raises to $15.00 per hour

After that, the North Dakota Commissioner of Labor would adjust the wage annually for any cost of living increases.

Craig Whitney, president of The Fargo Moorhead West Fargo Chamber of Commerce, said the organization typically wouldn't take an official position until after such a measure were formally placed on the ballot.

However, he said The Chamber generally supports allowing the free market, not government, to dictate wages.

Whitney said a higher minimum wage would probably affect small businesses the most, and 90 percent of Chamber members are small businesses. He thinks essentially doubling the minimum would be bad for them and their customers.

"They could have potentially less employees, they're going to provide fewer services, and they're probably going to raise their rates to the consumer," Whitney said.

Minneapolis model

The city of Minneapolis passed a new minimum wage ordinance that took effect Jan. 1, 2018.

It's similar to what's proposed in North Dakota, but slightly more gradual.

In Minneapolis, a $10-an-hour minimum is in effect for large businesses with more than 100 employees. That increases to $15 an hour in 2022.

Small businesses don't have to hit the $15 mark until 2024.

The city's Department of Civil Rights oversees enforcement of the new wages.

Chief of Staff Andrew Hawkins said they've received 44 formal inquiries from employers seeking clarification of the ordinance. Seven employees have filed formal complaints.

Five of those are being investigated over claims that employers are paying less than $10 an hour, according to Abigail Cerra, lead investigator of the Labor Standards Division.

The number of complaints is lower than expected, Hawkins said, due to uncertainty over a lawsuit by the Minnesota Chamber of Commerce seeking an injunction against the ordinance.

Hawkins said a judge recently denied the motion, allowing the ordinance to take effect.

Whether the $15 minimum wage initiative in North Dakota makes it to the November ballot, or ultimately faces any legal challenge, remains to be seen.

But Nodland said it's only a matter of time before minimum wage earners make more.

"It's going to happen," he said. "It's just a question of how long we're going to let people suffer."