Omdahl: Pondering the low wage conundrum
In Montana, the minimum wage is $8.75; in South Dakota it is $9.45; in Minnesota it’s between $10 and $8.21, depending how big you are. Some North Dakota developers think that a low minimum wage ($7.25/hour in North Dakota) attracts industry and that explains the rush of business into the state.
It seems immoral to have North Dakotans selling their lives for $7.25 an hour. It wouldn’t even be that high if the federal government didn’t set the minimum wage at $7.25.
The Legislature passed up the opportunity to start rolling the minimum wage up to $15 an hour by 2027. The proposal by Rep. LaurieBeth Hager of Fargo lost in committee 12-2 and was swamped on the floor where it was opposed by 79 Republicans and three Democrats, the only bipartisan action of the session.
Meanwhile, an effort to get the $15 minimum wage was grounded at the federal level when the parliamentarian of the House ruled that it could not be included in the $1.9 trillion dollar bill that solved most other problems.
When it comes to minimum wage, North Dakota and its neighbors go opposite directions North Dakota's minimum wage policies vary significantly from its neighbors Minnesota, Montana and South Dakota. The three bordering states all have minimum wages higher than the federal rate and make annual adjustments to their respective minimum wages.
Ordinarily, North Dakota waits for other states to set the course before dipping its toes in the water. In the case of the minimum wage, this is not the case as the state is surrounded by higher minimum wages.
In Montana, the minimum wage is $8.75; in South Dakota it is $9.45; in Minnesota it’s between $10 and $8.21, depending how big you are. Some North Dakota developers think that a low minimum wage attracts industry and that explains the rush of business into the state.
The point is that none of the states are offering a minimum wage equal to the cost of living. In North Dakota, an 8-hour day would produce a gross weekly income of $58. Of course additional benefits could be added, thereby putting flowers on the poverty wage.
It is true that no one can live on the North Dakota minimum wage so it is fortunate that very few people are stuck at that level. Actual wages are set by employers and not state or federal law and vary considerably across the state.
Our smaller communities are struggling to keep their main streets viable in spite of the declining markets. The small retailers cannot balance their books at $15 per hour and the clerks can be paid only $8 or $9 an hour in a labor market that provides no employment opportunities.
On the other hand, larger communities have major out-of-state markets that boost personal and corporate income. Among them we will find workers being paid in excess of the $15.
Minnesota has solved this problem by having steps in its minimum wage so the smaller business is not required to pay a “one-size-fits-all” minimum wage. Of course, North Dakota can keep the minimum wage so low that it is never a factor because few in North Dakota are being paid $7.25.
The minimum wage argument has become a problem for the government because the anti-union legislation has destroyed unions as the biggest bargainers for wages and working conditions. The federal government has taken over a lot of the working conditions through the Occupational Health & Safety agency.
So the business community traded unions for federal oversight. And the federal government is always more generous than the individual states so it was no gain for business.
There is no doubt that the fight over minimum wages is one of the battle lines of the “haves” and the “have nots.” To correct the economic deficiencies of the system requires some shifting of private and public resources.
Is it government’s responsibility to get a greater amount of public resources distributed to the “have nots”? We are already doing that with some programs but maybe strategic planning could do more to close the wide gap between the “haves” and the “have nots.”
It should be obvious to everyone that present system begs for economic justice. A lunch at McDonalds doesn’t cut it.
Omdahl is a former N.D. lieutenant governor and retired University of North Dakota political science teacher. Email email@example.com
This column does not necessarily reflect the opinion of The Forum's editorial board nor Forum ownership.