Column: Stay out of the kitchen
ST. PAUL --Too many cooks in the kitchen will spoil the broth. We have all heard the saying that teaches us the importance of respecting roles and responsibilities, but it seems as though lawmakers ignored this principle while working on the recipe for growing Minnesota's economy. Two recent events in Minnesota point to a troublesome trend in the legislative process. The two events that have filled the blogs and the tabloids are the Twin Cities nurses' strike and the latest political flap over the tip credit. The first question you may be asking: What do these two stories have in common? The response is simple -- they have to do with employee compensation and government regulation of the workplace.
It seems that all the commonly talked about issues of state spending, health care, education and taxes sometimes overshadow the fact that government plays an ever increasing role in mandating what happens in the workplace. As an employer for the past 30 years, this is a topic that I have some first hand knowledge of.
Starting with the basics:
Minnesota is an employment-at-will state. In simple terms, this means an employer can hire or fire an individual at will without cause -- providing, of course, there is not a contract in place and that all other labor and employment laws are followed.
Second, Minnesota is not a "right to work" state. This means that if there is a collective bargaining agreement in place, you are automatically subject to the terms of the agreement of the labor contract.
The challenge from this point on is for an employer to follow all of the government workplace rules and regulations. The federal government has over 180 workplace mandates and regulations. The State of Minnesota, of course, adds many more. These rules and regulations cover a vast array of subjects from age of workers, hourly compensation, rest periods, lactation rooms and many, many more. So, what is my point?
Very simple, do we really need more workplace rules handed down by a bunch of lawmakers who have never employed anyone?
Every legislative session dozens of bills are introduced in the legislature that modify, add or create new workplace rules. Everything from continuing education requirements to what constitutes a "quit" of a job assignment.
The recent labor dispute with the Minnesota Nurses Association is a perfect example of the push by unions for more laws governing the workplace.
At the conclusion of the contract dispute between the Minnesota Nurses Association and the 14 Twin City hospitals, the nurses union stated they would seek legislation to place nurse staffing ratios in law. In other words, what they were unable to accomplish through the collective bargaining process they will now try to achieve by applying political pressure.
This has become an all-too-frequent strategy for many groups -- what we can't get at the negotiating table, they take to the halls of the Capitol.
Is the legislature the proper venue for labor disputes? Don't we already have an over-abundance of workplace mandates? The current political flap over the issue of having a lower minimum for some tipped employees all started when governor candidate Tom Emmer was asked if he favored having a tip credit in Minnesota. His response was "yes" and in the ensuing food fight, governor candidate Margaret Anderson Kelliher said she favors raising the minimum wage by $1.50.
Few workers, or for that matter employers, understand the basics of a tip credit, let alone have an understanding of the economics of the issue. The concept of a tip credit is not new and outrageous as the media would lead you to believe; 43 other states currently use the tip credit system. Yet the simple mention of the topic has been front and center in the news for several days and has fanned the political debate over workplace compensation.
Whatever happened to the simple process of an employer offering a job to an individual who accepts or rejects the offer?
This basic concept of a mutual agreement that both parties believe to be in their individual best interest might actually help grow our economy and spur job growth -- particularly private sector job growth within small businesses, the backbone of the U.S. economy.
It seems as though these legislators have forgotten that these restaurants and businesses that pay minimum wage are owned by Minnesotans that are feeling the financial impacts of the recession just like everyone else.
If Speaker Kelliher's proposal were to become law and the minimum wage was increased by $1.50 an hour, it would mean that a business owner who has 10 full-time employees would need an additional $31,200 a year just to meet payroll expenses.
The net result would likely be a reduction in the number of workers. Most economic studies show that an increase in minimum wage will result in a decrease in employment of minimum wage workers. Is this the approach we should take for job creation?
The economic impact over the minimum wage has been debated for years, including the question of a tip credit. In the current situation the best things policy makers can do to stimulate the economy is to refrain from mandating more workplace rules. Wage, benefit and other employment issues are best settled through collective bargaining or in direct discussions between employers and employees.
Phil Krinkie is a former state legiislator and president of the Taxpayers League of Minnesota.