Feb 06, 2007 - 04:01:00 CST
Multiple proposals to raise North Dakota's minimum wage have opened a common divide on the issue, pitting labor unions and progressive interest groups against restaurants and small business owners.The divide was on full display Monday during a legislative hearing on two minimum wage bills that would raise the rate from $5.15 to $7.25 an hour by 2009.
Senate Majority Leader Bob Stenehjem, R-Bismarck, said he sponsored a minimum wage increase that's tied to federal action because he wants the state to keep up with national trends in fair worker pay.
"I want to ensure that North Dakota will be in line with the federal minimum wage whenever that legislation takes effect so that North Dakota's citizens won't be left behind," Stenehjem said.
The U.S. Senate voted last week to raise the federal minimum wage from $5.15 to $7.25 an hour and provide tax breaks to small businesses. The U.S. House passed a version in January without the tax cuts, and leaders from the two bodies are currently negotiating their differences.
Sen. Tim Mathern, D-Fargo, said he's standing by a separate measure he sponsored in December because he believes what North Dakota does should not be tied to the federal government.
Mathern said an immediate minimum wage increase is necessary because workers at that wage are falling farther below the poverty level every year.
According to the U.S. Census Bureau, a minimum wage worker fell below the poverty line around 1980 and has been falling farther under ever since. A minimum wage worker made $10,172 in 2005, which is $4,865 below the poverty line for a family of three.
"When this happens, we are just shifting costs to the government and destroying families' self-esteem," Mathern said.
Mathern's proposal would go into effect this summer. It would mean a direct pay raise for 21,000 North Dakotans earning minimum wage.
John Risch, state legislative director for the United Transportation Union, said an increase would be in the spirit of helping workers, which inspired the original minimum wage legislation during the Great Depression.
"Those original goals were great, but inflation is constantly eroding its purchasing power," Risch said.
The $5.15 per hour minimum wage has lost about 20 percent of its purchasing power since it was last raised, in 1997, according to the Center for Economic and Policy Research, a Washington, D.C.-based research organization.
Don Morrison, executive director of NDPeople.org, a nonprofit that advocates for progressive causes, said this slippage is causing more workers to fall into poverty.
"A job should keep you out of poverty, not keep you in it," he said.
Morrison said minimum wage laws also say a lot about how a state treats its poorest citizens.
"Without an increase in the minimum wage, it shows that we think these people are not worth a decent life," he said.
But if the minimum wage were increased, where would the money come from?
That was the main question posed by opponents of the bill who say such an increase could lead to job losses and the closing of small businesses.
Bill Butcher, State Director for the National Federation of Independent Business, said many small business owners have years where they make very little money.
"This could easily put them out of business," he said.
Butcher said a minimum wage should be set by private market negotiations between employees and their potential employers.
"This way, the individual employee can ask for what he needs and the employer can offer what he can afford," Butcher said.
For businesses that don't want to raise wages, supply and demand would eventually force them to if they wanted to have staff, he said.
Nicki Weissmann, executive director of the North Dakota Hospitality Association, said many restaurants in the state want to pay their workers more but can't afford to.
A government-imposed increase would put them in a tough situation, she said.
"The checkbook says I don't have the money. Do we lay somebody off? How do we accomplish this?" Weissmann said.
(Reach reporter Jonathan Rivoli at 223-8482 or jonathan.rivoli@;bismarcktribune.com.)
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