Minnesota has highest median wage in Midwest — and other labor news

Grecia Palomar guides a group of drywall finishing apprentices at the Finishing Trades Institute of the Upper Midwest on March 23, 2023, in Little Canada. Photo by Nicole Neri/Minnesota Reformer.

Take a seat in the Break Room, our weekly round-up of labor news in Minnesota and beyond. This week: Minnesota’s strong labor market; United Steelworkers support new studies for stalled mine; Sun Country flight attendants authorize strike; Harris adopts Trump’s no-tax-on-tips idea; Walz speaks at AFSCME convention; and Trump applauds firing striking workers, which is illegal.

Minnesota’s strong labor market

Minnesota is one of the best states to be a worker, with relatively high wages, strong wage growth, high labor force participation, high rates of employer-provided health insurance and plentiful job opportunities.

In 2023, Minnesota had the highest median wage in the Midwest at $26.43 per hour, the fourth highest labor force participation rate at 68.3%, and the second smallest share of workers earning poverty wages at 13%.

That’s according to the union-backed think tank NorthStar Policy Action’s inaugural “ The State of Working Minnesota ” report, which provides an overview of the state’s economy as it pertains to workers.

The past four years have been destabilizing for many workers, between the COVID-19 pandemic and high inflation. But the state has had a strong recovery. Minnesota set a total employment record with nearly 3 million jobs in 2023 and saw its unemployment rate sink to a near record low at 2.9%.

Wages have also outpaced inflation, which has now fallen below 3%, meaning that workers are relatively better off even though they may still be wincing every time they check out at the grocery store.

Minnesota has the Midwest’s highest rate of union membership at 13.2%, although the report notes that’s due to the state having a slower decline in unionization than the rest of the region. Union density is an important metric because higher rates of unionization are tied to higher wage growth and lower income inequality for all workers.

Union workers in Minnesota have seen significantly higher wage growth since 2020 than their non-union counterparts. The median union wage rose $3 dollars per hour adjusted for inflation, compared to just 3 cents for non-union wages.

Like the rest of the country, Minnesota continues to have persistent disparities in income between men and women; between white workers and Black and Latino workers; and between the highest and lowest earners. Even the wages of some of the highest earners look paltry compared to what CEOs are paid .

While the job market is strong now, there are signals, including rising unemployment and slowing labor force growth, that higher interest rates are pushing the economy toward a recession.

United Steelworkers cheer new copper-nickel mining studies

The United Steelworkers, which represents about 3,500 miners in Minnesota, applauded an announcement by NewRange Copper Nickel that it will study new environmental safeguards for a proposed mine near Babbitt that has been stalled for years by legal challenges.

The $1 billion open-pit mine, called NorthMet, would be the first copper-nickel mine in Minnesota and create new union jobs, but the project has lost a series of challenges to its permits over environmental concerns. Environmental advocates warn the mine could irreparably harm the watershed that feeds into nearby tribal lands and Lake Superior.

NewRange Copper Nickel, which says the study isn’t in response to legal losses, will look at alternatives for tailing storage, water treatment and emission reduction.

The United Steelworkers said the project will create union jobs and can be operated without significantly damaging the environment

“This project and projects like it are a vital part of our nation’s transition to clean energy, and will help to support a domestic supply chain of critical minerals while limiting the impact on the environment,” said USW District 11 representative John Arbogast, in a statement.

Sun Country flight attendants authorize strike

Flight attendants for Minnesota-based Sun Country voted to authorize a strike with 99% support, frustrated by the airline posting record revenue this year while not increasing wages since 2016.

“The people who run this company want to sit back and do nothing but collect a fat check while everyone else at Sun Country works hard for peanuts,” Tom Erickson, president of Teamsters Local 120, told the Star Tribune . “They’re in for a rude awakening. Our members are furious, and they will do whatever it takes to get what they deserve.”

Harris and Trump both support tax-free tips

Kamala Harris has been notably vague about her policy positions since entering the race for president, which made her adoption of Trump’s pitch to end taxes on tips all the more surprising to her fellow Democrats.

Trump floated the idea this summer as he seeks to increase his support among working-class voters (especially in the battleground, tourist economy state of Nevada), while also courting the very rich by promising to extend the tax cuts he signed into law in 2017. Those cuts would mostly benefit corporations and the highest earners while driving up the national debt by $4 trillion over the next 10 years, according to some estimates.

The tipped wages proposal will likely have broad appeal among service workers, so it’s not surprising Harris made the commitment at a rally in Las Vegas, where the powerful Culinary Workers Union could help tip the swing state in her favor.

Yet some labor economists and tax experts say that despite the idea’s populist appeal, a tip tax exclusion would do little to increase service workers’ incomes. To start, many tipped workers earn so little they don’t pay very much in income taxes.

“Tipped workers don’t need a tax cut. They need a raise,” wrote Vox ’s Abdallah Fayyad . (Harris also said she supports raising the federal minimum wage.)

The tax exemption might also disincentivize employers from raising base wages while cementing the service industry’s reliance on tips. It would likely reverse the trend toward the service fees in restaurants that aim to provide earnings predictability and create more equity between front-of-house and back-of-house jobs.

There’s also the question of fairness: why should workers who earn wages through tips pay less in taxes than those with similar incomes in other jobs? Others argue that a tip tax exemption simply restores the reality of tipped work before widespread credit card use when cash tips were rarely reported as income.

On Friday, Harris rolled out some more details of her economic plan, including a ban on grocery “price gouging” and an expanded Child Tax Credit of $3,600 for middle and low-income families per child, or $6,000 for a baby less than a year old. Harris also continued Biden’s commitment to not raise taxes on anyone earning less than $400,000 per year.

Walz speaks at AFSCME

In his first solo campaign appearance as the presumptive Democratic vice presidential candidate, Gov. Tim Walz addressed members of the public-sector union AFSCME at its annual convention in Los Angeles on Tuesday.

Walz boasted signing into law one of the most worker-friendly agendas in sate history, which included mandatory paid sick leave, a new paid family leave program and a ban on employers requiring workers to attend anti-union “captive audience meetings.” That ban is now being challenged in court, and Walz was added as a defendant after he erroneously said “you go to jail if you do that” at a building trades union conference earlier this year.

Walz also hit on the conservative blueprint for a second Trump term, Project 2025 , which suggests banning public-sector workers — like those Walz was addressing — from unionizing. The conservative plan, led by the Heritage Foundation, also proposes eliminating mandatory overtime pay, loosening child labor standards and allowing employers to discriminate against people based on sexual orientation or gender identity.

Trump has disavowed Project 2025, but its co-author Russell Vought served under Trump as the director of the Office of Management and Budget and told journalists the disavowals were simply “graduate-level politics.”

“I’m a football coach at heart,” Walz told AFSCME members. “I’ll tell you one thing I know for sure is, if you’re going to take the time to draw up a playbook, you’re damn sure going to use it.”

Trump promotes firing striking workers

Former President Donald Trump praised firing striking workers — even though it’s illegal under federal labor law — during a two-hour-long conversation with billionaire Elon Musk on his platform X on Monday.

“You’re the greatest cutter. I mean, I look at what you do. You walk in and you just say, ‘You want to quit?’ They go on strike. I won’t mention the name of the company, but they go on strike and you say, ‘That’s okay. You’re all gone. You’re all gone. So every one of you is gone,’ and you are the greatest,” Trump told Musk.

The comment was an apparent reference to Musk laying off thousands of workers at Twitter — roughly 80% of the workforce — after he took over the platform.

Musk has a long history of playing hardball with employees who criticize him or try to unionize , as well as federal labor regulators at the National Labor Relations Board. Musk’s SpaceX filed a lawsuit challenging the constitutionality of the NLRB’s enforcement proceedings after the agency filed a complaint against the company for illegally firing eight workers who circulated a letter critical of him.

Trump’s comments cut against his campaign’s efforts to court blue-collar workers across the industrial Midwest. His running mate, J.D. Vance, emphasized Trump wasn’t talking about them at a rally at a trucking company in Michigan on Wednesday.

“Donald Trump was not talking about firing Michigan auto workers, he was talking about firing the employees of Twitter who used their power to censor American citizens. Those people ought to be fired,” Vance said, according to Michigan Public .

The United Auto Workers, whose members won 25% pay raises through a six-week-long national strike last fall, filed an unfair labor practices charge against Trump and Musk with the NLRB, saying the comments amount to illegal intimidation.

“When we say Donald Trump is a scab, this is what we mean. When we say Trump stands against everything our union stands for, this is what we mean,” said UAW President Shawn Fain in a statement .

The Trump campaign called the UAW charge a “shameless political stunt.”

Teamsters President Sean O’Brien, who spoke at the Republican National Convention last month at Trump’s invitation, responded forcefully, saying : “Firing workers for organizing, striking, and exercising their rights as Americans is economic terrorism.”

O’Brien won some praise for speaking at the RNC and attempting to expand support for pro-worker legislation among Republicans. But he also faced sharp criticism from labor leaders, who said he allowed himself to be exploited by Republicans to create a veneer of economic populism as they court working-class voters.

A Teamster local president in Florida sent O’Brien a letter on Wednesday criticizing him for being one of the few union leaders to withhold his endorsement of Kamala Harris.

“I am completely disappointed and appalled at your decision to court one of the most anti-union, anti-worker politicians in history, Donald Trump,” Josh Zivalich, Teamsters Local 769 wrote.