Minimum wage hikes nice but don't net much

All Will Fisher really wants out of life is a warm place to stay and a few hands of Texas Hold 'em at the local bar.

There's no money involved in Fisher's poker hobby. He's too frugal to gamble, since he supports himself working roughly 60 hours a week at three part-time jobs, all paying rates at or within a stone's throw of minimum wage.

Previous coverage
• August 2014: Minnesota workers get a minimum wage raise today
• April 2014: Wage hike stirs worry among the not-so-small businesses

That kind of job situation is exactly what state lawmakers wanted to address when they raised the minimum wage in Minnesota. Most employers had to boost the bottom of the scale from the federal minimum of $7.25 to $8 starting Aug. 1. That day the minimum rate of pay in Minnesota rose 10 percent.

Fisher, a 45-year-old with no specialized job training or college degree, is the type of worker one might expect would get a raise from the Aug. 1 minimum wage increase. That pay increase, however, looks a lot better on paper than in his pocket. His weekly take home pay is up just $3 a week.

Of Fisher's three jobs, only one pays the actual minimum wage. His short weekend stints at Erbert & Gerbert's sandwich shop are a small portion of his total work week, so the bump in the minimum wage doesn't add up to much on that paycheck.

Fisher's two other jobs in food service at Bemidji State University and the Sanford Events Center paid a bit more than $8 an hour even before the minimum wage bump, so there's no raise showing on those paychecks.

Minnesota Department of Employment and Economic Development data suggest Fisher's situation is fairly common, especially in Bemidji — a place with many low wage jobs that aren't quite low enough to be affected by the minimum wage increase.

Last year, when the Minnesota Legislature was debating the idea of a wage increase, DEED researchers estimated roughly 20 percent of northern Minnesota jobs would see increased pay.

But that's when lawmakers were considering a raise from the federal level of $7.25 per hour to $9.50. When the legislation settled on a new minimum of $8 an hour, the number of workers potentially affected dropped.

"Employers are struggling to find workers at the minimum wage."

The $8 minimum is the first of several phased increases. It goes to $9 in August 2015. In 2016, the wage will hit $9.50 minimum wage for businesses with gross sales over $500,000.

The law also triggers automatic inflationary increases in the minimum wage starting in 2018, unless the commissioner of the State Department of Labor and Industry decides the economy could not handle an increase.

Jobs paying the absolute minimum wage aren't all that common, but in northern Minnesota many don't pay much more than minimum. In 2013, nearly 80 percent of the region's part-time positions started at less than $9.50, but DEED Analyst Cameron Macht said even those jobs often pay more than the minimum.

"Employers are struggling to find workers at the minimum wage," he said, "so they likely are having to aim higher with their wage offers to attract new workers.

Fewer than 7 percent of Minnesota jobs, he said, fell below the new $8 per hour threshold as of August. In other words, only 1 job in 14 saw a jump in pay that month.

One of Fisher's many bosses, Sanford Center Concessions and Bar Manager Joe Phelps wasn't surprised at the limited impact of the new law. Phelps paid his roughly 70 part-time workers at least $8 an hour long before August.

"There are a lot of food service jobs here" he said. "A lot of jobs in hotels."

"People tell me about these magical things called vacations. What are they?"

Jobs in leisure, hospitality and retail trade industries generally pay lower wages. They're the jobs traditionally affected by minimum wage changes. But their abundance in the Bemidji region has the effect of pushing wages above the minimum. Roughly 30 percent of employment in Beltrami County falls into the leisure, hospitality and retail category, compared to just 20.5 percent statewide.

The large number of such jobs, Phelps said, makes it hard to attract workers with just the minimum wage. When the minimum wage increased in August, he gave most of his employees a 50-cent raise, just to keep them interested. In Bemidji, he said low paying jobs generally pay more than the minimum, but less than $9.50.

Will Fisher, like many workers in the Bemidji area, might make more than minimum wage, but it's sometimes still a challenge to get by. He moved to Bemidji more than 20 years ago. Since then Fisher has worked half a dozen food service jobs, many at the same time. He lives with a handful of roommates in a modest rental house. He's single, has no children to support, and aside from the occasional Saturday night off, his work weeks haven't fallen below 60 hours in 10 years.

Yet, despite all those working hours, some weeks, his bank account runs low enough he has to wait for payday to cover some bills.

"People tell me about these magical things called vacations," he said. "What are they?"