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<br /> side of the jobs equation is examined most closely. Activists,like Jacobs says.A higher minimum would not necessarily result in higher prices be-
<br /> and Mel Duncan of the Minnesota Alliance for Progressive Action,want cause,in a monopsony,firms are making excess profits and would essen-
<br /> to focus on business subsidies and job-quality issues."We want to see jobs tially swallow the increased costs.Judge cites a study of McDonald's
<br /> become more valuable,"Jacobs says. Her organization plans to push on restaurants in California,where an increase in the minimum wage did not
<br /> two fronts this year:creating tougher penalties for companies violating the affect the price of Big Macs.
<br /> minimum-wage law and requiring greater accountability from companies "You want to send a message that work pays,"Judge says,"and right
<br /> that receive state assistance. For instance,Jobs Now plans to push initia- now that just isn't the message."
<br /> tives to compel companies receiving state assistance to provide information The monopsony theory is one that many economists do not buy,says
<br /> about jobs created,including asking them to list every new job and its pay Miller,who views the minimum wage as a tax transfer without the middle-
<br /> rate with a state service. Many of the jobs being created with state tax
<br /> breaks and other subsidies are low-wage,"junk jobs,"she says. "Secrecy
<br /> keeps wages down."
<br /> Duncan's organization is developing proposals to require companies that DEMANDING WORTHY
<br /> hold slate contracts to pay$7.28 an hour or more as a minimum wage. WORKERS
<br /> They are also considering introducing a "maximum wage" law, under AND WORTHWHILE WORK
<br /> which the state would set a level for paying the chief executive officer of a
<br /> company—say,20 times the wage of the lowest-paid worker—and the
<br /> company would lose (lie ability to dedulC( the rest of the CEO's salary. The personal is political for Kris Jacobs.
<br /> The executive director of the Jobs Now Coalition helped push several
<br /> They'll also go after any proposals to provide public assistance for a new mandated-wage bills through the Minnesota Legislature in 1996.All but
<br /> baseball stadium as"corporate welfare." one were vetoed by Governor Arne Carlson,but Jacobs expects to be
<br /> "I don't care how liberal somebody is,"Duncan says of the Pohlad fami- closely involved in several wage-enhancement efforts in 1997.And she
<br /> ly,owner of the Minnesota Twins,"a family with a net worth of$840 mil- plans to keep the pressure on business.
<br /> lion is not eligible for public assistance." Because of the new federal welfare law requiring a quicker return to
<br /> The Chamber's Hesse also would like to see more public reporting of the work by welfare recipients,'Welfare is no longer a human-services issue,"
<br /> jobs created through state programs for business,but he thinks increasing Jacobs says."It's a labor-market issue."
<br /> restrictions on business focuses on the wrong side of the equation."There "Employers are bitching about the supply side,"Jacobs says of
<br /> • complaints about poorly trained workers,"but we'll keep them[the
<br /> seems to be a big disconnect with Kris Jacobs and some of these other ac- legislature]looking at the demand side.As long as employers keep the
<br /> tivists when you start talking about the employee,"Hesse says."They nev- focus on the supply side,they can say people are getting low wages
<br /> er want to talk about the skill level of the people that are going to be hired because they are not worth it.But what about the demand side?These
<br /> and their productivity.They've never been able to answer the question are throwaway jobs.
<br /> that if the person does not bring$8.25 an hour or whatever to the business "Business won't like this context,"she continues.
<br /> then how can (flat wage be paid? If a business can't get a certain value Jacobs's passion for politics took seed in rural Illinois,where she grew
<br /> from the emplovec.they just won't hire." up poor.Her mother left the family when she was nine,and her father
<br /> refused welfare.As a result,Jacobs and her siblings"ate field corn to
<br /> That issue is expected to gain salience as the state moves forward with survive in the summer"and"skipped lunch at school so other kids would
<br /> welfare-reform efforts.The new federal law requires that 30 percent of the not know we couldn't afford to eat."
<br /> 50.000 single-parent families receiving Aid to Families with Dependent When Jacobs was 12,authorities took the children away and she lived
<br /> Children be working at least part-lime when the new law is implemented, in an institution until she finished high school.It was when she first studied
<br /> and 75 percent of the 5,000 two-parent families on welfare must have at economics that she saw where her family fit in the marketplace.
<br /> least one worker. Minnesota Department of Health and Human Services "Society's contempt for poor people oppressed us enormously,"she
<br /> expects that up to 12,(X)0 additional people will be moved off of welfare says,"and that's where I get my energy today."
<br /> Jacobs's resume includes stints at the national AFL-CIO,the United
<br /> and into work be(w•ecn now and 1998, largcly into entry-level, low-wage Steel Workers of America,the Village Voice,and the National Cambodia
<br /> jobs."This is a very significant increase in emplovmcnl,"Duncan says. Crisis Committee.She co-founded OMB Watch,a group that monitors
<br /> federal administrative and regulatory issues.She spent 12 years in
<br /> Washington,D.C.,mostly working for the National Family Farm Coalition,
<br /> ome economists argue that raising the minimum wage would actually an organization that lobbied for supply management in agriculture and
<br /> increase the number of people working by making work more attrac- was noted for getting country singer Willie Nelson involved in federal
<br /> live,particularly in an area where (here is a shortage of labor.The agricultural policy.While at the coalition,she"fell in love over the phone
<br /> with a bankrupt farmer."They married,and she moved to Minnesota and
<br /> current minimum wage creates a situation economists call"monopsonistic began working for Jobs Now in 1991.
<br /> exploitation,"says Rebecca Judge,an economics professor at St.Olaf Col- Jacobs defies the image of a soft-hearted liberal.She's tough and likes
<br /> loge in Northfield,who believes the minimum wage needs to be increased to show it,often telling business owners who complain about poor work
<br /> more.A monopsony is a market in which the product or services of several habits among low-wage workers to fire the offenders.
<br /> sellers is sought by only one buyer. 'They're surprised that a liberal will be hard-nosed about it,"she says.
<br /> The theory assumes that companies hiring low-wage workers do not face "But when someone comes to work for Jobs Now and they don't do the
<br /> much competition for those workers and so have discretion in setting job or they don't show up for work,they're out of here.That's how you
<br /> wages.A higher minimum wage would increase productivity and employ- build value into the job." —M.L.S.
<br /> menu because more people would want to work at the higher wage,.fudge
<br /> TWIN CITIES BUSINESS MONTHLY DECEMBER 1996 43
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