PoliGraph: Thissen’s minimum wage claims mostly true

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In a speech to union workers this week, House Speaker Paul Thissen said the Legislature is focusing on putting more money in the pockets of Minnesotans.

Chief among those priorities are raising the minimum wage and making sure women get better pay.

“The argument that the Republicans make that this is going to undermine jobs, that it’s going to tank our economy, simply don’t hold up to the facts,” Thissen said. “We did it in the 90s, and our economy got better, we did it in the mid-2000s and our economy got better.”

Thissen went on to point out that woman are particularly affected by changes in the minimum wage.

“Sixty percent of the folks on minimum wage or less are women in this state. They make up 50 percent of the workforce, but they are disproportionately working at low-paying jobs.”

Thissen’s claims need some context, but overall he is accurate.

The Evidence

Minnesota has raised its minimum wage several times since the early 1990s, and the federal minimum wage has increased over that period of time as well. Minnesota workers can earn anywhere between $4.90 and hour, the training minimum wage, and $7.25 an hour, the federal minimum wage, depending on where they work and how large their employer is.

According to data from the Minnesota Department of Employment and Economic Development, Minnesota’s total non-farm employment increased steadily during the 1990s, hit a bit of a plateau in the early-to-mid 2000s, dipped during the recession, and has been on the upswing in the last few years.

If raising the minimum wage had a direct impact on the state’s employment, you would see spikes in retail and accommodation employment where hourly work is most common, said DEED’s Oriane Casale, who is Assistant Director for the Labor Market Information Office.

But that’s not the case. Instead employment in both those sectors has essentially followed total non-farm employment over the course of the last few decades, according to DEED’s data.

Furthermore, periods of economic growth are usually the result of many factors, not just the wage paid to the lowest–earning workers.

How raising the minimum wage affects the economy is a source of long-standing debate among economists.

One recent study looked at minimum wage increased over the course of 16 years found that higher wages helped workers and didn’t lead to job cuts. Meanwhile, a Congressional Budget Office report concluded that raising the minimum wage would bring 900,000 people out of poverty, but also lead to job losses. That study was criticized by some of the same economists who have found raising the minimum wage has a positive outcome.

On his second point, Thissen is correct.

Here’s what a recent report by the Minnesota Department of Labor and Industry had to say on the statistics:

“Women were more likely than men to be paid the minimum wage or less (6.0 versus 4.4 percent). Because of this and the fact that they made up 53 percent of all hourly workers, women accounted for 60 percent of all hourly workers at or below the minimum.”

The Verdict

Thissen is correct that arguing that raising the minimum wage would tank the economy and lead to job losses is going too far.

But that claim also risks leaving the false impression that boosting the minimum wage would lead to job increases. At least in Minnesota, there’s little evidence of that.

All together, Thissen’s claims are right – but barely.

ADDITIONAL SOURCES

Mike Howard, spokesperson, House Speaker Paul Thissen

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