Friday, June 17, 2016

Dave's Will Be Crippled By Minimum Wage Increase

And other not-too-terribly sexy policy updates

Posted By on Fri, Jun 17, 2016 at 11:01 AM

click to enlarge daves.png
At a Cleveland City Council committee meeting Thursday morning, the Saltzmans of Dave's Markets (Steve, Dan and their papa, Burt) testified that the proposed city minimum wage increase, to $15 from the state's current $8.10, would cripple their grocery store business.

Though many of Dave's employees already make more than $15 an hour — $18.27, on average, according to an A1 story in the PD by City Hall correspondent-sleuth Leila Atassi — entry level pay is still in the eight dollar range. And a precipitous wage increase in the city of Cleveland alone might necessitate closing a location or two, Steve Saltzman said.

That would be a bummer for many of the low-income neighborhoods where Dave's has invested, and councilpeople took turns applauding the Saltzmans for the nutritional impact of their stores, especially when other supermarket brands have refused to establish locations in the non-sexy outposts of the urban core.

The minimum wage hearing yesterday was one in a long series. Council President Kevin Kelley, who has vocally opposed the wage increase on the theory that it puts Cleveland at a competitive disadvantage, has said he'll host a hearing on the topic every week until a decision is made. Next week's meeting is scheduled for Wednesday at 10 a.m. 

The tone from city leadership tends to echo the RTA's, as the transit authority has instituted fare increases and service cuts. Both the city and the RTA have essentially abdicated responsibility by putting the ball in state or Federal courts. Joe Calabrese, RTA's 16-year CEO, enlisted sympathies by citing, nonstop, the fact that the state of Ohio has contributed next to nothing to public transit. (That's true, but he's used it to validate his contention that the RTA had no other choice but to raise fares, but no local sustainable funding mechanism was even considered.)   

On the minimum wage front, Kelley and Jackson (and the Greater Cleveland Partnership, certainly) have said they support the increase in principle, but that unless it's instituted statewide, Cleveland will be economically imperiled by all the fleeing businesses. That also may be true — and the Dave's testimony is the most compelling yet, on that front — but it positions city leadership, once again, as adversaries of Cleveland's battered low-income workforce. 

Two councilmen have proposed alternatives to the instant increase to $15, an increase which would represent the largest in the country, according to the GCP's Joe Roman.

Councilman Brian Cummins, who has dived into research with his usual rigor and transparency, has suggested an incremental increase to $12/hour by the year 2022. That's an alternative that likely won't sit will with the members of Raise Up Cleveland, the group formed to gather signatures on the minimum wage issue,  but it's a proposal Cummins says is tied to the median wage. And it's one he's cooked up after conversations with local economists and business owners. That proposal here:
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"I would argue that by following sound economic advice - of considering increases to no more than 50-60% of the median wage, with annual increases below 7%, we could improve wages for low income earners and set an example for our State and the nation as taking a prudent approach to a very difficult challenge," Cummins wrote on his blog. "Namely, how can we as a municipality help our most vulnerable in being able to earn a decent and fair wage without having detrimental impacts to our economy?"

Councilman Jeff Johnson, the only councilperson to support the original proposal, has offered an amended version whereby the minimum wage would increase to $15 by 2022. He suggests that employees should be paid $12/hour by 2017, with an increase of $0.75 per year for the next four years. After 2022, wages would be tied to inflation. 

If council votes down the original $15/hour ordinance, or if they adopt one of these alternate plans (or any other version), the petitioners may put the original language on the ballot for Cleveland voters.

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