Effort to set $15 an hour as the standard lacks thorough planning

Cleveland faces a current challenge to the viability of its businesses and its very closely related economic health. The Service Employees Industry Union (SEIU) is using the planned turnout of the upcoming November election and a ballot petition process to force a $15 an hour minimum wage for all city of Cleveland workers.

This is part of a nationwide initiative to target some vulnerable cities to drive their own efforts towards re-establishing viability.

Opposition grows

Mayor Frank Jackson is opposed. Most of Cleveland City Council is opposed. Business groups, civic groups, constituencies of all types have come out against this minimum wage initiative. This feels a lot like the marijuana legalization issue last year when everyone with any common sense was against it, but a few special interests that stood to gain a lot pushed forward anyway.

SEIU is that special interest this time. But, unless something remarkable happens soon, the signatures the organization have gathered will put it on the ballot in November.

This isn’t about helping anyone — because it won’t. This is about SEIU’s agenda. Don’t get me wrong; I am not against a minimum wage. Like other regulations and laws, there have to be some standards. And, when they are well-thought out, weighed with costs and benefits and enacted through a legislative process, we need to abide by them.

And, if our businesses are impacted, we need to make the hard decisions to change our model or exit. It’s that simple.

A disadvantage

The biggest flaw in this effort is that the new $15 an hour minimum wage would be just for companies in the City of Cleveland. It would immediately disadvantage Cleveland to the rest of the state.

If passed, we know what happens next. We will all look at the costs involved and potentially exit the city. The good news is that the first-ring suburbs and beyond will welcome with open arms those who exit, taking the jobs, income tax and investment right out of Cleveland. The very companies that have established themselves and hire and train low-skilled workers in the city will have to avoid the costs they can’t pass on.

At a minimum, it will make an already hard commute to work for their employees even harder. At worst and more likely, those employees will be left behind.

If employers don’t move, they will just cut jobs — an 80 percent increase in wages will demand that. Discretionary hires and summer help at $8 or $9 an hour go away. For many businesses, especially those in health care that rely on reimbursement, there will be no way to recoup these costs.

Unfortunately, even if this particular issue doesn’t make the ballot, this minimum wage fight will likely not be the last. It’s very important that as an employer you tell your story about how this increase could affect you and the employees that depend on the work you provide. Reach out. Cleveland needs your help!

Steve Millard is president and executive director of the Council of Smaller Enterprises. For the last 15 years, he has guided COSEís work to support the success of small business owners and act as a nonpartisan advocate and resource for their needs on the state and national levels. Contact him at www.cose.org