coming together : promises and pitfalls of minnesota's corporate-accountability campaigns

Peterson

46 WorkingUSA—Winter 2001–2002

WorkingUSA, vol. 5, no. 3, Winter 2001–2002, pp. 46–80.© 2002 M.E. Sharpe, Inc. All rights reserved.

ISSN 1089–7011 / 2002 $9.50 + 0.00.

Coming TogetherPromises and Pitfalls of Minnesota’sCorporate-Accountability Campaigns

Erik Peterson

Minnesota’s 1999 Corporate Subsidy Accountabilitylaw provides a model example for the growingmovement around corporate subsidy standards. It grewout of half a decade of activism concerning subsidyabuse and living wage campaigns. This article traceshow state legislative action mixed and evolved withgrowing grass-roots efforts by labor and communitygroups. Peterson ends by highlighting lessons forsimilar activism across the country.

IN 1994, when Minnesota began working on corporate-accountability issues, any discussion of what constituted a“living wage” was far from front-page news, and the term

“corporate welfare” had just been coined. Over the past six years,Minnesota has become a national leader in raising the issue of

ERIK PETERSON is the Northeast Program coordinator of the Labor Education Service, Univer-sity of Minnesota. As an AFSCME organizer and labor educator, he co-coordinates the Duluth Liv-ing Wage Coalition and co-facilitates the Community Religion Labor Network. He serves as co-chair of the St. Louis County Living Wage Task Force, was a commissioner on the 1997 LegislativeCommission on Corporate Subsidy Reform, serves on the board of the Minnesota Alliance for Pro-gressive Action, and has consulted on many living-wage campaigns in Minnesota and throughoutthe country.

Coming Together

WorkingUSA—Winter 2001–2002 47

livable wages and in pushing for public accountability of corpo-rate subsidies. As a union organizer and labor educator, I havebeen directly or indirectly involved in many of Minnesota’s liv-ing-wage and corporate-accountability campaigns, sometimesin a consulting role, sometimes in a legislative role, sometimesas an organizer directing the campaign itself. I am also a laborhistorian who looks to history to learn new lessons that can beapplied to future struggles. In telling the story of the Minnesotaexperience, I hope to provide organizers a more realistic picturethan the seamless, celebratory stories in which we often wrapour victories. I believe that the Minnesota experience offers away to see living-wage and corporate-accountability campaignsnot simply as ends in themselves, but as a way of building pro-gressive coalitions that can challenge corporate power, changeour political culture, and open new opportunities for low-wageworkers to organize.

Shifting Politics

Across the nation, living-wage campaigns have responded to apolitical climate where workers’ wages have lost ground to in-flation at the same time that corporate profits and governmentsubsidies to private businesses are at an all-time high. The Min-nesota experience is no different. Minnesota has long enjoyed anational reputation for progressive politics and for having astrong social safety net. We have routinely bucked national po-litical trends and often lead the nation in voter turnout and sup-port for Democratic presidential candidates. Minnesota also hasa long history of grass-roots rural agricultural and urban laborpopulist political movements.1 Yet, over the past several years,Minnesota’s political climate has shifted. Minnesota still has oneof the most progressive tax structures in the nation, but in recentyears the state legislature has increasingly focused on cutting

Peterson


business property taxes and sales taxes on capital equipment,and reducing workers’ compensation taxes—all directed at “im-proving” Minnesota’s business climate. These changes in taxpolicy have increasingly shifted costs to workers and individualproperty owners. The wealthiest families in Minnesota, follow-ing national trends, have seen their incomes grow at the sametime that their overall tax burden has shrunk.2 In 1998, all sevenmajor party candidates for governor ran on tax-cut platforms,and the recent debates over what do with Minnesota’s recordbudget surpluses assume first that all or large portions of thisextra state revenue will be “given back to the people” insteadof making up ground lost in education, health care, housing,social services, and the state’s physical infrastructure duringthe previous decade. Despite its reputation as a “different kindof state,” Minnesota is increasingly looking like the rest of thecountry.

Minnesota Alliance for Progressive Action

In response to these shifting politics and priorities, the Minne-sota Alliance for Progressive Action (MAPA) formed in 1988.Dave Mann, one of MAPA’s founders and its former executivedirector, describes MAPA as a response to a “growing frustra-tion with the unwillingness of ‘friends’ in the legislature . . . totake difficult votes” and set a progressive political agenda.3

MAPA currently has twenty-eight member groups represent-ing diverse constituencies—labor unions, seniors, environmen-talists, women, consumers, affordable-housing and low-incomeadvocates, peace and social justice activists, communities ofcolor, and gay/lesbian advocates—all committed to “the long-term work of building progressive power.” As the only “per-manent, multi-issue, multi-constituency coalition inMinnesota,” MAPA works only on issues that cut across many

Coming Together


different constituencies, which all define and implement a pro-gressive political agenda, build political power, and increasecitizen participation and voice in the political process. Overthe past several years, Mann notes, MAPA has increasingly “fo-cused on the power of large corporations to influence electionsand public policy and how they benefit from these policies.” Itwas out of this philosophical and political position that MAPAbegan to focus on living-wage and corporate-accountabilitymeasures in the mid-1990s.

Changing the Debate

The years 1994 and 1995 were not good for progressive politics.The national debate over the need to raise the minimum wagehad collapsed into a debate over “one dime versus three dimes.”4

Universal health care had effectively been erased from the na-tional political agenda. In November 1994, Newt Gingrich andthe Republicans ignited a new “Republican Revolution” whenthey took over both the U.S. House and the Senate in the largestmidterm political shift in U.S. history. For progressives, this glumpolitical outlook became even glummer when President BillClinton began “triangulating” his way to reelection by making“ending welfare as we know it” his top priority.

In Minnesota, as elsewhere, progressives felt (and were)clearly on the defensive. “It felt like all we were doing wasrushing around putting out fires,” recalls Alexa Bradley, whoco-directed MAPA with Dave Mann at the time. As a way forprogressives to insert their agenda back into the political de-bate, MAPA began self-consciously searching for issues thatwould refocus the debate away from the problems of “big gov-ernment” to the problems of “big corporations.” At the timethere were few models. One of the few available was GregLeRoy’s No More Candy Store, a compilation of laws from around

Peterson


the country that held corporations accountable for governmentsubsidies.5 Many of LeRoy’s examples came from plant clos-ings or renegade companies that took taxpayer money and thenleft town, but his use of a rhetoric of “accountability” that couldbe applied back to corporations rather than to individuals heldpromise.

Focusing on corporate accountability offered a whole differ-ent way of talking about economics and about who was princi-pally benefiting from the “New Economy.” MAPA had beenworking on income inequality issues for many years. They hadreceived some attention for their “4% Solution”—a 4 percentincrease in the income tax rate for the top 4 percent of Minne-sota wage earners with the additional revenue going tostrengthen the state’s social infrastructure and lower taxes forlower-income taxpayers. But in the face of all the media atten-tion being given the Republican “Contract for America,” MAPAneeded a “hook” to grab media and public attention. They foundthat hook in the term “corporate welfare” just as the welfarereform debate began heating up.6

The media quickly adopted the term “corporate welfare” asa rhetorical label for taxpayer subsidies to private businesses.7

“If we had done a press conference on corporate subsidies orbusiness accountability, the press would have said, ‘A story ontaxes, what a snooze,’ “ Bradley recalls. “But ‘corporate wel-fare’ got the media’s attention because it was current and itseemed like a contradiction in terms.” It also offered a way oftaking the hot topic of welfare reform and turning it upsidedown to ask who, in fact, controls and benefits most from pub-lic resources: single mothers or wealthy corporations? Equallyimportant, it became a way to mobilize progressives and theirallies to go back on the offensive in “a politically bold way toconfront corporate power that was both fun and serious at thesame time.”8

Coming Together


Building a Movement: Baby Steps

Duluth’s 1995 Corporate-Accountability Policy

In Duluth, the Northeast Minnesota Senior Federation also be-gan looking for ways to shift the debate over taxes. Founded in1975, the Senior Federation is the oldest, largest, and most sig-nificant organization representing seniors in Duluth, with over4,000 dues-paying or affiliated members. The organization hasalways worked on issues that directly benefit people of all ages,not just seniors, and has an impressive record of accomplish-ment ranging from securing lower utility and garbage collec-tion rates to fighting gas-price gouging to securing statelegislation providing health-care and prescription drug benefits.A consistent theme over the years has been tax policy, particu-larly how property taxes, as a regressive tax, hurt low-incomepeople, who disproportionately include seniors.

In 1995, the Senior Federation’s Tax Committee began look-ing for ways to enlarge the debate. Buddy Robinson, staff direc-tor for the Senior Federation, recalls that members wanted to“find meaningful ways to act locally to reduce property taxesthat also challenged the state’s shift from more progressive in-come taxes to more regressive property taxes.”9 Although theSenior Federation was not directly involved in MAPA’s effortsto redefine the welfare debate, it asked Alexa Bradley from MAPAto present a tax workshop for their group. This workshop madethe link between tax increment financing, or TIF, and individualhomeowner property tax bills. TIF redirects property tax rev-enue to private businesses instead of to general fund expendi-tures such as fire and police protection, sewers, and parks. Unlessa city cuts these services or reduces costs in other ways, the netresult of a city’s high reliance on TIF is to shift the tax burdenfrom business property to individual property taxpayers.10 TheSenior Federation also found in Greg LeRoy’s book specific leg-

Peterson


islative examples that offered ways to bring attention and ac-countability to Duluth’s use of tax increment financing. At thetime, TIF amounted to nearly 20 percent of Duluth’s entire taxcapacity.11

The Senior Federation used the 1995 city elections to securepledges of support from the mayor and from several city coun-cilors running for election. After the election, they were able topass Duluth’s first corporate-accountability measure—a mod-est requirement that the Duluth Economic Development Author-ity (DEDA) hold public hearings for subsidies over $50,000 intax increment financing and report on the number and qualityof jobs created (including wages paid) from such subsidies. Al-though modest, this resolution represented the beginning ofwhat has become a six-year debate in Duluth over corporateaccountability.

Minnesota’s 1995 Corporate Welfare Law

In 1995, MAPA began working at the state legislature to pass alaw making corporate welfare more accountable. What account-ability actually meant was debatable, and the idea of requiringbusinesses that receive public subsidies to pay their employees atleast a “living wage” began as a tactic. According to Alexa Brad-ley, “Living wages became a way of directing public scrutiny to-ward public subsidies of private businesses to raise the questionof ‘Why are we subsidizing a private enterprise in the first placeif the public doesn’t get something from it?’”12

MAPA drafted a bill that required businesses receiving morethan $25,000 in public money to create a net increase in jobs inMinnesota within two years of receiving the assistance, paywages of at least 110 percent of the federal poverty line for afamily of four for all new jobs created, or repay the subsidy ifjob and wage goals were not met. It further directed the Depart-

Coming Together


ment of Trade and Economic Development (DTED) to prepare areport for the legislature each year evaluating business assis-tance programs, the number of jobs proposed, the number ofjobs created, and the wage and benefit distribution for thosejobs.13

What began as a “tactic” quickly became the focus of the leg-islative battle. On the one side, living-wage proponents arguedthat public dollars should be held accountable to higher stan-dards, and, at a minimum, jobs created at public expense shouldpay at least a wage above poverty level. On the other side, thechamber of commerce and other business interests argued thatgovernment had no business interfering in the marketplace and“artificially” setting wage rates. They claimed that such inter-ference would deter economic development, and any new re-porting requirements would be too intrusive and burdensomeand place Minnesota at a competitive disadvantage with otherstates. Ironically, this debate occurred at a time whenMinnesota’s economy was booming and the state was routinelyoutperforming the nation and surrounding states in job cre-ation and income growth. Nevertheless, in the end, the living-wage provision was stripped out of the final bill, and all thatpassed were the rather innocuous wage and job goal require-ments and an annual report compiling this information. “Wethought we had lost,” recalls Bradley, “but what we didn’t atfirst realize is that we had stumbled into something much big-ger than we had originally thought.”14 By passing this simplemeasure, Minnesota had become the first state in the nation tosystematically account for public subsidies provided to corpo-rations.15 It was the data collected from this first Corporate Wel-fare Reform Law that became the basis for five years oforganizing, which culminated in 1999 with Minnesota passingthe strongest corporate-accountability law of any state in thecountry.

Peterson


Building a Movement: The Debate over Living Wages

Over the next several years, attention remained focused on try-ing to pass significant legislation that required a living wage forall jobs created through corporate welfare. This focus narrowedthe debate over corporate accountability to a relatively smallgroup of workers and specific types of economic development,but it also provided a hot issue to organize diverse communitycoalitions in ways that a broader corporate-accountability agendacould not. Focusing efforts on winning living-wage legislationalso created a political context for groups across the state to worktogether and to begin to play off of each other’s efforts.

St. Paul Living-Wage Referendum Crushed

During the summer of 1995, the Association of Community Or-ganizations for Reform Now (ACORN), a national organizationcommitted to organizing low-income people, launched a series ofliving-wage campaigns across the country. In St. Paul, it helpedcreate the Campaign for Jobs and a Fair Wage, which initiated areferendum effort and collected thousands of signatures to put aliving-wage ordinance on the November ballot. This living-wageordinance required all businesses receiving more than $25,000 inpublic subsidies to pay their employees at least a poverty-levelwage for a family of four—defined as $7.21 per hour in 1995.16 Italso required businesses receiving public assistance to create anet increase of jobs within two years after receiving the subsidyand to hire a certain percentage of city residents through a “com-munity hiring hall.”17 St. Paul Mayor Norm Coleman deployedhis communications director, Erich Mische, to lead the effort todefeat this initiative. Coleman called the living wage a noble causebut a “job killer,” and in November, after a blistering campaign,the initiative went down in a landslide defeat.

Coming Together


The reasons for defeat are many, not the least that living-wageopponents outspent supporters nearly seven to one.18 But thisimbalance of resources was not the only reason for theordinance’s defeat. While proponents effectively gathered sig-natures to put the measure on the ballot, they did not begin build-ing the coalition necessary to withstand a fierce anti-living-wageopposition until relatively late in the campaign. The DemocraticFarmer Labor Party (DFL), which is the dominant party in St.Paul politics, was never seriously brought into the coalition. Keylabor unions, including the Central Labor Council and the Ameri-can Federation of State, County, and Municipal Employees(AFSCME) were not consulted on the law’s residency require-ments, an issue they had opposed for public employees for manyyears. There may have also been some internal tensions withinthe labor movement. As one St. Paul labor organizer recalls, “Theperception by the labor bureaucracy was that [the living-wageordinance] would lessen their power.”18 The ordinance itself alsohad problems, principally that it covered all businesses receiv-ing subsidies, regardless of size, making it possible for the op-position to cherry-pick individual “ma and pa” minoritybusinesses that could be held up as potential victims of the ordi-nance. In short, the campaign did not successfully demonstrateto many constituencies why passing a living-wage requirementshould be a key issue.

Despite the setback, the St. Paul referendum put the debateover public subsidies and corporate accountability into thecenter of political debate and effectively made the case thatthe community was owed something for investing taxpayermoney in private businesses. In Minneapolis, activists beganpushing for similar living-wage provisions, and a year later,activists in Duluth formed the Duluth Coalition for a LivingWage, which eventually passed the first living-wage ordinancein Minnesota.

Peterson


Twin Cities Joint Living Wage Task Force

Although the November election set back living-wage efforts,living-wage supporters secured commitments from the St. Pauland Minneapolis city councils to form a Twin Cities Joint LivingWage Task Force. This task force was composed of representa-tives from economic development agencies, labor, and other com-munity groups from both cities and had the purpose of makingrecommendations for a living-wage policy.

Strategically, forming the task force kept the living-wage de-bate alive after a serious defeat, but as a tactic to find “commonground,” the results were more mixed. Some task force mem-bers like MAPA’s Bradley look back on the experience as per-haps “our biggest mistake,” because it drew attention away frombuilding grass-roots power and support in the community tofighting an insiders’ game among sometimes hostile constituen-cies. The reasons behind the task force’s mixed results are many.Progressives organized well to have living-wage supportersappointed to the task force, but support among these presumedallies could not always be counted on. One key building tradesrepresentative and statewide labor leader came into the discus-sions stating, “Some jobs don’t deserve a living wage.” Anotherconcern arose with the co-chairs of the task force. For politicalreasons, the heads of the Minneapolis Community DevelopmentAssociation (MCDA) and the St. Paul Port Authority—the twolargest economic development authorities in the Twin Cities—chaired the task force. These co-chairs were able effectively tocontrol debate and threaten to oppose the final recommenda-tions if certain provisions were not included.

Not surprisingly, after nearly eight months of bimonthly meet-ings, the task force arrived at an uneasy consensus. Living-wagesupporters were able to pass a living-wage requirement of 110percent of the federal poverty wage for a family of four—$8.25

Coming Together


an hour in 1996. They were also able to include labor peace lan-guage, which made a business’s “responsible labor practices” acondition for receiving a subsidy, and a requirement that 60 per-cent of all new employees be city residents. But living-wage op-ponents exempted key types of business subsidies, includingredevelopment assistance, which accounted for nearly 75 per-cent of all economic development assistance given. The task forcerecommendations were presented to the two city councils, andin late 1996 Minneapolis passed its living-wage policy, and atthe beginning of 1997 St. Paul passed its policy. The final resolu-tions were weaker than even the task force recommendations,because living-wage activists had not “built a base of commu-nity support sufficient to fight the claims of living-wage oppo-nents and force councilors to pass stronger measures.” Two yearsafter passage, not a single worker in either St. Paul or Minne-apolis came under the resolution’s requirements.20

Building a Movement: Duluth’s Experience with Grass-rootsCoalition-Building

Activists in Duluth looked to the Minneapolis and St. Paul ex-perience, as well as other living-wage campaigns around thecountry like Baltimore and Los Angeles’s path-breaking cam-paign in early 1997, and began building the community supportand broad-based grass-roots coalition necessary to pass a strongordinance.

Duluth has a rich history of organized labor, and with nearly30 percent of all Duluth workers represented by unions, it ranksamong the top cities in the country with high union density.Despite this labor heritage, Duluth’s politics has long been con-trolled by “old money” and business-oriented conservatives. Likemany industrial cities, Duluth was ravaged by deindustriali-zation in the 1970s and early 1980s, and lost nearly 20,000 resi-

Peterson


dents, or about one-fifth of its population. In the mid-1980s, abillboard on the hill leading out of town read: “Would the lastperson out please shut off the lights?”

This history is important for understanding Duluth’s obses-sion with recruiting new businesses and its fear that any restric-tions on that ability will result in further job loss. This fear hasnot always served Duluth well. In the late 1980s, Duluth grabbednational headlines when Diamond Tool, a leading manufacturerof quality tools, used $10 million in low-interest City of Duluthbonds to purchase new equipment, only to move that equip-ment to plants in the south and close down its Duluth facility.This experience sparked some brief interest in new accountabil-ity safeguards, but it did not result in any serious challenge tothe city’s pro-development, pro–public subsidy approach to eco-nomic development. Since the mid-1980s, Duluth’s economyhas shifted increasingly to part-time and low-wage tourism andother service-sector jobs. By the mid-1990s Duluth was knownfor its low wages. During 1994–1996 city officials, through theDuluth Economic Development Authority, put together sev-eral large tax increment financing subsidies to telemarketingfirms and three hotels on Duluth’s waterfront. Most of the jobscreated through these subsidies paid wages just above mini-mum wage.

In January 1997, several Duluth progressive activists beganbuilding a coalition of community organizations to challengethis approach to economic development. Duluth’s Living WageCoalition became the most diverse of any in the state, and theensuing eight-month campaign was one of the most dynamicgrass-roots organizing efforts in the country. In the end, the coa-lition included groups as diverse as the Central Labor Council,the Senior Federation, and the International Workers of the World(IWW), the DFL Party, the Green Party and key environmentalgroups, the Catholic Diocese, the local gay/lesbian organization,

Coming Together


students, teachers, and community clubs. In all, fifty-sevengroups eventually endorsed the living-wage ordinance andjoined the coalition.

There were many reasons community groups joined. The Se-nior Federation had a long interest in tax increment financingand corporate-accountability issues. They also had strong sup-port among their members who had watched their children andgrandchildren leave during the economic downturns of the 1970sand 1980s. Groups like Churches United in Ministry (CHUM),which organizes the food shelf, saw the living wage as a way ofmaking the case that not everyone was benefiting from the boom-ing economy. Groups like Low Income People Organizing forPower (LIPOP), which was organizing against welfare reform,saw in the living-wage campaign a way to create more living-wage jobs and draw a contrast between public assistance to cor-porations and public assistance to individuals. The most activeunion in the coalition was the public employee union, AFSCME,which has had a long commitment to supporting basic economicjustice issues in Duluth. AFSCME also saw in the living-wagedebate a way to frame the privatization of public services in adifferent way: that public money should not go to create low-wage, low-benefit jobs for workers doing the public’s work. Sev-eral churches saw the campaign as a way to enact the socialministry statements of their various denominations. Neighbor-hood community groups often responded to the way public sub-sidies to businesses diverted city resources away from supportingneighborhoods. What united these fifty-seven diverse groupswas a common goal that government has a responsibility to usepublic money to create jobs that pay wages above the povertyline and that private businesses that receive public money shouldbe accountable to some public good. Most of the groups werealso committed to building individual and institutional relation-ships that might strengthen a progressive challenge to Duluth’s

Peterson


business-oriented political culture on other issues.Organizing efforts were furthered by actions taken on the state

level by the Minnesota Twins when they tried to lobby the legis-lature for a new taxpayer-financed stadium. This proposal ig-nited a firestorm of public opposition. On the day of the vote,the capitol’s switchboard crashed for the first time in historyunder the volume of spontaneous citizen calls of opposition. InMinnesota, corporate welfare had a new face in the Twins owner,billionaire Carl Pohlad. And yet, in March 1997, when the Liv-ing Wage Coalition announced its intention to pass a living-wageordinance in Duluth, Mayor Gary Doty, backed by the DuluthChamber of Commerce and all but two city councilors, pledgedto veto “any living-wage policy” that might be passed.

Three months later, the Duluth City Council passed by a five-to-four margin the strongest living-wage law in the country atthat time. Mayor Doty, who had opposed the ordinance at everyturn, felt compelled to make a midnight appeal before a packedcity council chamber to living-wage opponents pleading that they“had to swallow hard and pass something.” The reason for thisturnabout was due to a massive grass-roots mobilizing effortundertaken by the coalition. By the time the ordinance passed,coalition members had door-knocked nearly one-third ofDuluth’s households, mailed out more than 10,000 leaflets,dropped literature in key precincts, generated more than 1,000postcards to targeted city councilors, and dominated the localand regional news for weeks. Internal polls done by a sympa-thetic telemarketing firm showed 75–80 percent support for theordinance. Unfortunately, in the end, councilors stripped theservice contract and city employee provisions out of the finalordinance, and the wage rate was too low to make a meaningfuldifference for most workers.21 But Duluth, which became thesmallest city in the country with a living-wage law and one ofthe first to apply a living-wage standard to corporate welfare,

Coming Together


also became a model for state efforts and played a significantrole in shaping Minnesota’s Corporate Subsidy AccountabilityLaw passed in 1999.

Putting It Together: Building a Movement Long-Term

As in any organizing campaign, the Minnesota campaign to passa significant corporate-accountability law developed through aseries of steps, some seemingly insignificant, some even defeatsthat nonetheless provided opportunities to organize (see timelinein Appendix A). It would be nice to think that these events werecarefully planned and coordinated, but the reality is that anyreal coordination between corporate-accountability efforts on astatewide level and local living-wage efforts did not begin untillate 1997. This creative collaboration emerged as the most re-markable piece of Minnesota’s experience: The ultimate goalbecame not simply to pass a specific piece of legislation but tocreate new ways of challenging corporate power and new op-portunities for organizing and keeping the issue alive through-out the state.

St. Paul’s living-wage referendum went down in flames in 1995with the skepticism, if not outright opposition, of the chamber ofcommerce, nonprofits, small businesses, and some labor unions-—a strange combination that agreed on little else than that theyfelt the ordinance hurt them. Yet the St. Paul effort thrust the con-cept of living-wage standards into the public discourse, and thelessons learned during the campaign helped create better legisla-tion and stronger coalitions in future efforts around the state. Thisunsuccessful campaign also gave birth to the Joint Living WageTask Force, whose recommendations became the basis for living-wage policies in St. Paul and Minneapolis. In 1995, MAPA securedminimal reporting requirements for job creation and wage goalsfor businesses receiving public subsidies. This provision was so

Peterson


vaguely worded it was unenforceable, yet its inability to be en-forced (and the outright defiance of the law by numerous cities)highlighted the problem and created an opportunity to organizefor more effective laws. And in Duluth, a series of questionableeconomic development deals, along with the city’s refusal to fol-low earlier council resolutions requiring performance reports onbusiness subsidies, helped make the case for an enforceable liv-ing-wage ordinance. When Republican governor Arne Carlsonvetoed MAPA’s living-wage requirement in 1996, MAPA turnedto passing a more limited bill, which created the 1997 LegislativeCommission on Business Subsidy Reform to study the issue andmake legislative recommendations.

Legislative commissions are usually clever ways for legisla-tors to kill grass-roots activism without actually having to voteagainst whatever measure is being championed. In this case,however, the Legislative Commission of Corporate Subsidy Re-form became a way to unite various living-wage and corpo-rate-accountability efforts from around the state and beginbuilding bipartisan legislative support. For the Duluth legisla-tive hearing, the Duluth Living Wage Coalition mobilizednearly 200 living-wage supporters, and the legislative hearingsmade front-page news. In Minneapolis and St. Paul, ACORNand other groups mobilized more than 150 citizens to attendthe hearings. MAPA also drew on its relationships with corpo-rate-accountability campaigns around the state to recruit cred-ible and diverse supporters to apply to serve on thecommission. Art Rolnick, director of research for the Minne-apolis Federal Reserve Bank, had worked with earlier MAPAorganizing activities against the Twins stadium deal, and hebrought extraordinary credibility in the media as an informalspokesperson for the commission. I also served as a commis-sioner because of my experience working on the Duluth liv-ing-wage campaign, which had led to my involvement with

Coming Together


other living-wage and corporate-accountability campaignsacross the country.

After a year of meeting, commissioners drafted a consensusdocument that made strong recommendations to the legislature.Unlike earlier MAPA legislation, the commission report had aveneer of bipartisan buy-in, and with it came a certain legiti-macy not previously enjoyed.22 Contained in the commission’sfinal report were many of the provisions that had earlier beenintroduced through Duluth’s living-wage ordinance. In 1998, anew corporate subsidy reform bill was introduced in the legisla-ture based on the commission’s report. This 1998 bill died in arules interpretation fight between the House and Senate, but itwas reintroduced in 1999 and, except for the removal of the liv-ing-wage proposal, was passed largely intact.

Minnesota’s 1999 Corporate Subsidy Accountability Law

The story behind passing the 1999 law illustrates well how alegislative approach can both open up new organizing opportu-nities and at the same time, by pursuing an “insider” strategynecessary to pass significant legislation, make it difficult to sus-tain broad grass-roots support and involvement.

Ultimately, the 1999 law was possible only after five years oforganizing and building awareness among the media, the pub-lic, and legislators. But there was also a bit of serendipity, suchas the Twins stadium fiasco and a few egregious examples ofarrogance on the part of economic development agencies. Oneparticularly vivid example came when Minneapolis CommunityDevelopment Agency (MCDA) representatives insisted, duringthe Legislative Commission hearings, that none of their $145million budget for economic development, including $43 mil-lion in tax increment financing and low-interest loans to a down-town Target department store, qualified under the 1995 state

Peterson


reporting law or the Minneapolis living-wage policy as “eco-nomic development” with the purpose of creating jobs. To thepuzzled looks of commissioners, including even Jay Novack, thehead of Minnesota’s Department of Trade and Economic Devel-opment , the MCDA representatives claimed such assistance wasfor “redevelopment,” not “economic development,” and there-fore was not covered.23

There were also several major obstacles to passing the 1999law, including the 1998 sea change in Minnesota politics thatushered in a “tripartite government” with Reform Party Gover-nor Jesse Ventura, a Republican-controlled House, and a Demo-crat-controlled Senate. Jesse Ventura’s election in 1998 wasanticipated to bring gubernatorial support for corporate-account-ability legislation, unlike Governor Carlson, who had vetoed the1996 living-wage requirement and had opposed other MAPAaccountability measures. During the campaign, Ventura hadregularly railed against big corporations and tax subsidies for astadium. But although Ventura wanted corporate accountabil-ity, he was philosophically opposed to living-wage mandates.Furthermore, the Republican House was strongly opposed notonly to any living-wage requirement but also to any further “gov-ernment burdens” on economic development or business. TheSenate was supportive of further accountability measures, butsplit on the living-wage requirement. What had been a dynamicgrass-roots organizing effort previously became a very insularprocess of closed-door negotiations between bill supporters(chiefly MAPA and AFSCME), key legislators, and opponents ofthe bill (chiefly the Association of Minnesota Cities and the cham-ber of commerce). The “living-wage piece was what caughtpeople’s attention and was what we could organize around,”said Beth Fraser, the lead lobbyist for the bill in 1999. But facedwith certain defeat if the living-wage provision was kept in thebill, MAPA agreed to drop it, and once that rallying point was

Coming Together


gone, negotiations “got into details and it got harder and harderto get people out and get them excited.”24

In the end, the key to passing the bill had less to do with citi-zen mobilization than with skillful insider politics and the care-ful selection of the bill’s authors. When the House killed the billwithout a hearing, the Senate countered by dropping the living-wage requirement and passing the rest of the bill as part of theSenate tax bill. This action ensured that it would go intact toconference committee, where differences in the House and Sen-ate tax bills would be reconciled. During the conference com-mittee, the Senate’s chief author of the bill, Senator JohnHottinger, managed to secure commitments to keep the corpo-rate subsidy reforms in. On the afternoon before the final day ofsession, MAPA lobbyist Beth Fraser, the key lobbyist for the Cit-ies, and the key House Republican sat in a room behind wherethe conference committee was meeting and “cut the deal.” Thisfinal agreement passed the conference committee, won a major-ity in the legislature, and was signed by the governor withoutfurther comment. In the end, Minnesota’s corporate-accountabil-ity legislation passed in much the same way business deals aremade (between lobbyists sitting around a table off a conferencecommittee meeting in the waning hours of the legislative ses-sion). But the legislation itself, and the fact that MAPA’s lobbyistwas “on the inside,” came about only through years of grass-roots mobilization and education. Still, this tension between coa-lition work and the “insider” political negotiations necessary topass a bill is an uneasy one. Focusing too much attention on theinside tactical maneuverings necessary to pass a bill can subvertthe equally important work of building progressive coalitionsand creating new ways of exercising power. MAPA is currentlyreexamining how it can continue to build ongoing grass-rootscoalitions within the dynamic of the legislative process.

The law itself significantly strengthened accountability for

Peterson


business subsidies and is still the strongest, most comprehen-sive corporate-accountability legislation of any state in the coun-try. In 2000, the law was further strengthened, despite a spiritedattempt by opponents to gut it. As it now stands, Minnesota lawrequires that all businesses receiving a public subsidy of morethan $25,000 define how the subsidy meets a “public purpose”and serves the public interest other than simply increasing thetax base. It requires businesses to set wage and job goals or, inthe absence of job creation as a goal, to establish “other tangible,measurable, and specific” goals. All subsidies over $100,000 musthave a public hearing and all subsidies over $25,000 must beapproved by an elected public body. Finally, the new law hasstrong and detailed reporting requirements and enforcementprovisions, including repayment of the subsidy if the publicpurpose goals are not met.25

Opening Up New Organizing Opportunities

The 1999 law requires that each local and state government entitythat provides business subsidies develop “public subsidy crite-ria,” including a wage policy. This requirement opens up neworganizing opportunities in every city where there is an economicdevelopment agency, which is virtually every city in Minnesota.In a press release announcing the bill’s passage, Senate chief au-thor John Hottinger highlighted this opportunity for public in-volvement, saying, “Citizens will no longer be excluded from thecritical decisions about how their money is spent.”26 Yet, in prac-tice, the results have been more mixed. Cities such as Minneapo-lis, St. Paul, Mankato, and Duluth passed strong corporatesubsidy criteria and accountability measures because there wereexisting, organized groups advocating for more accountability.But cities that had no organized groups often passed boilerplatecriteria, developed by a Minneapolis law firm, that skirts the

Coming Together


law’s intent by meeting the minimum legal requirements.Where cities have successfully pushed for significant subsidy

criteria, new opportunities for organizing have opened that otherMinnesota cities can follow. Mankato, for example, is like manyMinnesota cities in facing a housing crisis. The city passed crite-ria that included requiring businesses to commit 2 percent oftheir subsidy to improving housing for employees. St. Paul andMinneapolis also passed subsidy criteria that pushed beyondwhat the legislature mandated. And Duluth passed the stron-gest public subsidy criteria in the state. Included in their criteriaare specific questions that must be answered as part of a report tothe City Council defining the public purpose served by the sub-sidy, the potential environmental and economic impacts of thesubsidy, and full disclosure of any conflicts of interest. This reportmust be completed at least two weeks before any subsidy of$25,000 or more can be passed by the city council. After extensivepublic discussion (and closed-door negotiations), even the cham-ber of commerce and Mayor Doty supported this report, albeitreluctantly, and only because they knew that there were alreadyenough city councilors in support to override any veto.

Duluth’s public subsidy criteria also included “labor peace”language requiring “project labor agreements” for all construc-tion over $100,000 done by businesses receiving public subsidiesand “card check and neutrality language” to be included in busi-ness subsidy agreements of $25,000 or more. Project labor agree-ments guarantee that public money is not used to undercut localwages by using substandard contractors. Although such agree-ments do not guarantee union labor, often the exchange of a no-strike/no-picketing pledge by local unions with a developeragreeing to pay union scale translates into union labor. Card-checkand neutrality agreements also preserve labor peace by requiringthe employer to recognize its employees’ wishes to form a unionif a majority of its employees indicate that it is their desire. This

Peterson


alternative recognition process avoids the long delays often ex-perienced during traditional union elections directed by the Na-tional Labor Relations Board (NLRB) and the often hostileanti-union campaigns that many employers wage against em-ployees who want to organize a union. Minneapolis led the wayon these issues in Minnesota, and in 1999 they passed an ordi-nance requiring card-check and neutrality provisions for all newhotels that receive public subsidies greater than $100,000.27

In Duluth, despite being put into the subsidy criteria, laborpeace and project labor agreements did not go into effect. Understrong pressure from the mayor, the Duluth Building Tradesquietly withdrew their support of project labor agreements, fear-ing that the mayor’s opposition might result in fewer union con-struction projects. And although the Duluth City Council passedthe card-check and neutrality language as part of the businesssubsidy criteria, they were unable to override the mayor’s vetoof the provision.28

Nevertheless, new organizing efforts continue to open up. InDuluth, the Living Wage Coalition has become inactive but hasbeen replaced by a very active Community Religion Labor Net-work, which is focusing on many of the same issues of low wagesand workers’ right to organize. The Duluth Public Policy Alli-ance (DPPA) formed at the end of the living-wage campaign asa citizens coalition committed to monitoring and demandingaccountability for economic development projects in Duluth. Itnow claims a membership of more than 300 people. There is aNorthland Sustainable Business Alliance, which offers a progres-sive alternative to the chamber of commerce. The St. LouisCounty Living Wage Coalition, which formed after the 1997 fail-ure to include service contracts in the Duluth ordinance, is put-ting forward two resolutions in the fall of 2001 to requiredisclosure of wages and benefits for all county service contractsand a living wage for certain non–social service contract em-

Coming Together


ployees. And the Hotel Employees and Restaurant Employees(HERE) union just negotiated sweeping contracts at two Duluthhotels under a living-wage “Raising Our Standards” banner. Itis now helping to build a new community coalition out of manyof the former Living Wage Coalition groups—United for Socialand Economic Justice (USEJ)—to support their campaign to se-cure card-check and neutrality agreements at local five hotels.

In Minneapolis, efforts continue to strengthen the living-wageordinance and apply it to more types of subsidies. MAPA is us-ing the community and legislative relationships developed dur-ing its corporate-accountability campaign to highlight howmoney in the political process buys access and laws that benefitcorporate power over the public interest and to push for path-breaking campaign finance reform.

Lessons Learned

Despite all these efforts and with new efforts under way, it isimportant to note realistically that very few low-wage work-ers have seen wage increases as a direct result of our living-wage and corporate-accountability initiatives. This result is notan indictment of past efforts but a reminder that we are en-gaged in a long-term strategy and have only built a founda-tion, not achieved our goals. With that as a reminder, there aremany lessons that can be gleaned from the Minnesota experi-ence. Some highlight significant successes—others point outpitfalls to be avoided.

Changing the Terms of the Debate

In recent years, the political left has not done a very good jobof shaping public discourse in ways that further a progressiveagenda. In contrast, the political right has successfully claimed

Peterson


terms like “family values,” “competition,” “accountability,” and“big government” and has used these terms to rhetoricallymainstream its agenda. One source of power for the living-wageand corporate-accountability campaigns is their ability to takethe rhetoric often used against progressives and turn it towardour own ends. For Alexa Bradley, this meant, “The focus wasturned from these people over here receiving public assistanceto corporations over there that are receiving public assistance.It took businesses’ own words and turned their spotlight backon them.”29 Still, tearing down the master’s house with themaster’s own tools can be a risky enterprise. MAPA was some-times criticized for using the term “corporate welfare” as anegative term, since it played into negative social stereotypesof individuals on welfare. In a different way, the term “livingwage” has achieved enormous cultural currency, yet defininga living wage as somewhere around the federal poverty lineignores that such a wage, although significantly higher thanthe federal minimum wage, is nowhere near a true “livingwage.”30 And in Duluth, as elsewhere, the term “living-wagejobs” has become institutionalized as part of the rhetoric ofeconomic development. The bad news is that this use tries toco-opt the term and render it meaningless. The good news isthat living-wage opponents feel compelled to use the term de-spite its social justice links.

Building Ongoing Relationships and Broad-Based Grass-rootsCommunity Coalitions

Cities where the strongest organizing occurred passed the stron-gest living-wage and corporate-accountability policies. Duluthwas able to pass its ordinance despite overwhelming opposi-tion from city leaders because of the strength of its coalition.The strength of this coalition was due, in part, to key relation-

Coming Together


ships that were already in place. AFSCME and the Senior Fed-eration had a long-term relationship working on shared issueslike the county’s attempt to close its two nursing homes andother health-care issues. Because of this history, both organiza-tions felt comfortable donating staff time to the campaign. Onthe other hand, during 1998 coalition representatives enteredinto secret negotiations with representatives from the chamberof commerce to try to find “middle ground.” A compromisewas negotiated, but the chamber reneged on it when it camebefore the council. The months spent in these negotiationsdrained much of the momentum and enthusiasm from key coa-lition partners and set back perhaps more productive organiz-ing efforts.

The St. Paul referendum in 1995 lost, in part, because therewas never a broad, unified coalition behind it. Likewise, the dif-ferences between the St. Paul referendum and MAPA’s earlycoalition building are notable. Organized labor has played a criti-cal role in living-wage and corporate-accountability successes,providing not only resources and people but also institutionallegitimacy. The St. Paul referendum never had unified labor sup-port behind its living-wage ordinance. Issues such as hiring hallsand residency requirements split off or dampened the supportfrom what should have been key labor allies. Neither didACORN, the principle backer of the ordinance, then have ongo-ing long-term relationships with key labor groups.

MAPA, on the other hand, had institutional relationships witha number of key unions such as AFSCME, the Steelworkers, andthe International Union of Electrical Workers (IUE) alreadywithin the MAPA coalition itself. They had also developed a closeworking relationship with other unions and the state AFL-CIOwhile working together on legislative issues such as the Dislo-cated Workers Program. It was much easier for labor unions tosupport MAPA’s corporate welfare proposal because of these

Peterson


established relationships. Consequently, one of the key negotia-tors during the three years it took to pass the 1999 law wasAFSCME’s seasoned lobbyist Steve Hunter. Whether his involve-ment was principally due to his serving on the MAPA board orbecause of AFSCME’s support of the bill only underscores theimportance of building long-term coalition relationships.

Never Stop Organizing

One of the strengths of living-wage and corporate-accountabil-ity campaigns is their ability to unmask the hidden ways corpo-rate power operates through tax policy, government regulations,and special-interest laws. Corporate-accountability and living-wage campaigns offer a way for progressives to be proactiveand have others react to our proposals. For Alexa Bradley, suchefforts helped foster (and in fact created) the “feel of a move-ment” because we were doing something “bold, something thatdidn’t feel like it was coming out of the same place.” In Duluth,the Living Wage Coalition succeeded in winning public supportfor a strong ordinance, despite fierce opposition from the cham-ber of commerce and most elected officials. The coalition wasable to win a significant victory because it had built enough com-munity support and political pressure that it did not have toengage in negotiating a weaker compromise ordinance. MAPAagreed to take out the living-wage provision in the 1999 law andlost a critical issue necessary to mobilize around, but once theliving-wage requirement was eliminated, it became possible topass what is otherwise a very good law. Whether stronger grass-roots mobilization would have significantly changed this equa-tion will never be known. The bottom line, however, is that wherethe most active grass-roots organizing has occurred is also wherethe best legislation has passed and where new efforts and coali-tions continue to grow.

Coming Together


The Real Work Begins with Passing a Law

Strong, ongoing community coalitions are necessary to enforcethe laws that are passed. The history of enforcing living-wage lawsis quite dismal across the country, and Minnesota is no different.In Minneapolis, the MCDA continues to fight tighter controls onits business subsidies. In Duluth, less than six months after pass-ing the ordinance, the mayor pushed through an amendment re-ducing its reporting requirements.31 Looking back on the past sixyears, Alexa Bradley sees constant vigilance as the key for long-term success, since “No law alone can make the difference. It’speople who are organized who make it happen. If you don’t havea committed activist base to maintain vigilance, the best law onthe books won’t do anything.”32 But sustaining an ongoing coali-tion is easier said than done. Without an immediate, galvanizingissue to organize around, diverse coalitions tend to drift apart. InDuluth, the coalition’s shift in focus from living wages to othercorporate-accountability measures, such as card check and neu-trality and disclosure reports from subsidized businesses, beganto lessen the coalition’s solidarity. Groups such as the Duluth Build-ing Trades had less enthusiasm for any requirement that mightlimit new construction projects, and although it never opposedcoalition efforts, it was notably absent during that campaign. Ofcourse, not every coalition needs to be (or should be) permanent,but coalition members failed to do the hard work of ongoing coa-lition building. Those of us in the coalition who wanted to shiftthe focus to other corporate-accountability measures never madethe compelling case to other coalition members as to how suchmeasures might open new ways of securing living-wage jobs andbuilding power for low-wage workers.

Good Research and Good Political Analysis Are Invaluable

The living-wage and corporate-accountability campaigns ignited,in part, because the timing was right. Republicans and Demo-

Peterson


crats alike were attacking welfare, and while the economy wasbooming for businesses, many workers were not experiencingits largesse. A number of highly visible corporate welfare deals—the Twins stadium, Target in Minneapolis, Lawson Software inSt. Paul, the hotel deals in Duluth—each pointed out the prob-lems with corporate welfare and the need to strengthen the law,but each also made corporate welfare a local issue that neededto be dealt with by local elected officials. On a state level, MAPAcontracted with Greg LeRoy to analyze Minnesota’s economicdevelopment subsidies using the data collected through the 1995corporate welfare reporting law.33 His report found thatMinnesota’s economic development had “high costs, low wages,and an absence of standards to ensure that job subsidies pro-duce an effective return on taxpayers’ investment.” LeRoy’sanalysis and testimony before the legislature were instrumentalin passing the 1999 law.

Changing the Electoral and Economic Development Culture

For Buddy Robinson of the Senior Federation, the fact that theDuluth Coalition for a Living Wage even formed is more impor-tant than its lack of permanence. He notes that it solidified hisorganization’s ties with labor groups and built an informal po-litical coalition that has significantly transformed Duluth’s po-litical landscape. After the passage of the living-wage ordinance,a political alliance consisting largely of coalition groups electeda coalition member to the city council. In the next election, wewon a majority of city council seats and now hold a five-to-fourmajority on living-wage and labor issues. This political shift haschanged the way economic development is done in the city. Liv-ing-wage jobs have become a benchmark for evaluating eco-nomic development in ways that they were not before. Andalthough no worker has actually seen a raise directly because of

Coming Together


Duluth’s ordinance, the city is also no longer pursuing low-wagebusinesses. There are institutional changes as well. Currently,discussions are taking place within Duluth’s Economic Devel-opment Authority about how to reconfigure that organizationto be more reflective and responsive to the public. These are alldirect effects of the living-wage and corporate-accountabilityefforts over the past five years.

Creating New Organizing Opportunities

Living-wage and corporate-accountability laws are best used asways of building coalitions and furthering a progressive agenda,not as ends in themselves. One of the key lessons from the Minne-sota experience is to always think of new ways to keep the issuealive. Sometimes these ways were more accidental than planned,as in the case of MAPA’s early reporting requirements in the 1995Corporate Welfare Law. In other cases they were clearly planned,such as the 1999 law, which created opportunities to push for stron-ger accountability measures locally. When Duluth living-wagesupporters lost key service contract provisions, they joined otherSt. Louis County groups to push for a living-wage provision forcounty service contracts. Similarly, when DEDA began trying toundermine the new living-wage ordinance, the coalition success-fully passed a simple resolution requiring virtually all of DEDA’sexpenditures to come before the council for approval. This reso-lution later was incorporated in the 1999 state law. This require-ment alone significantly shifted the balance of power overeconomic development from the mayor’s office to the city coun-cil. City council approval also made electoral politics even moreimportant, and living-wage supporters now dominate the citycouncil. Having a majority of supporters (even coalition mem-bers) on the city council has had a powerful impact on shapingDuluth’s political and economic development culture. Ironically,

Peterson


however, it may be the coalition’s electoral successes that havealso made it harder to build and sustain the Living Wage Coali-tion itself, since the sense of “crisis” has passed.

Looking Forward

Living-wage and corporate-accountability opponents often chargethat such laws aren’t really effective in achieving what they aimto achieve. The answer to this charge depends on what we thinkthe goals of the movement are. If our goal is limited to raising thewages of specific types of low-wage workers, a growing body ofevidence suggests that tax changes, like the Earned Income TaxCredit, are likely more effective than passing local living-wagelaws. On the other hand, if our goal is to build a movement thatoffers a chance to challenge corporate power and the economicinequities that go along with such concentrated power, living-wageand corporate-accountability campaigns have initiated some pro-vocative challenges. If our goal is to build a broad-based politicalcoalition to secure more economically just legislation in the fu-ture and utilize the power of government to leverage workerswages up, then the living-wage and corporate-accountabilitymovement offers some very promising new opportunities. If ourgoal is to create opportunities that help low-wage workers or-ganize for power, the living-wage and corporate-accountabilitymovement can offer such opportunities. If our goal is to changethe culture and terms under which economic development isdone, living-wage and corporate-accountability campaigns havesignificantly altered the “business” of giving public subsidies tobusiness. And, finally, if our goal is to change the political andeconomic landscape so certain types of practices become increas-ingly more difficult, the living-wage and corporate-accountabil-ity movement has made some remarkable progress.

If we see living-wage and corporate-accountability laws as ends

Coming Together


in themselves, we are nearing a dead end. But the Minnesota ex-perience suggests that if we see such laws as tactics in a largerstruggle, then we are at a point in the struggle where we musttake a complex and strategic look at where we want to go next.

Notes

1. For example, the Granger Movement, the Non-Partisan League, and theFarmer-Labor movement in the early twentieth century represented significant chal-lenges by farmers and workers to corporate power. In more recent years, the elec-tion of Jesse Ventura and the success of the Reform Party in Minnesota draw onsimilar populist roots.

2. Minnesota Budget Project, “Making a Living? The State of Working Minne-sota” (2000); Michael P. Ettlinger, Tyson Slocum, and Robert Lynch, “Tax Strategiesfor a Strong Minnesota” (Washington, DC: Institute on Taxation and Economic Policy,1998); “Tax Fact,” newsletter of the Property Tax Study Project (November/Decem-ber 1999).

3. Dave Mann, unpublished memo on MAPA’s history, 4. All quotations fromthis section are from Mann’s memo.

4. Interview with Alexa Bradley, co-executive director of MAPA from 1994 to1999, St. Paul, 2001.

5. Greg LeRoy, No More Candy Store: States and Cities Making Job Subsidies Ac-countable (Washington, DC: Federation for Industrial Retention and Renewal andthe Grassroots Policy Institute, 1989, updated in 1994). LeRoy wrote the book withRichard Healey, Dan Doherty, and Roger Kerson. The book is dedicated to TomStillman, who led an unsuccessful fight to keep Diamond Tool in Duluth, MN, frommoving equipment purchased with $11 million in public bonds to southern plantsand closing its Duluth facility.

6. MAPA found much of its early evidence of the inequality in Minnesota’s taxpolicy in Minnesota’s annual “Tax Expenditure Report,” a report mandated by thestate legislature that accounts for how much the state “spends” on certain tax breaks.

7. The term “corporate welfare” first appeared in newspaper stories in early1993, but the term may have actually been coined by Senator William Proxmire. Itbroke into widespread usage when Robert Reich gave his famous speech to theDemocratic Leadership Council on November 22, 1994. In this speech, Reich para-phrased President Clinton’s campaign slogan and pledged to make “ending corpo-rate welfare as we know it” a goal. In Minnesota, the term was first introduced bythe Minnesota Alliance for Progressive Action (MAPA) in an April 1994 op-ed piecein the Star Tribune titled “Minnesota Would Do Well to Consider Corporate WelfareReform.”

8. Bradley interview.9. Interview with Buddy Robinson, executive director of the Northeast Minne-

sota Senior Federation since 1979, Duluth, 2001.10. Tax increment financing originated in the mid-1970s as an innovative way to

Peterson


redevelop polluted or blighted properties, known as “brownfields.” When a prop-erty is developed using TIF, the property is given an initial property value assess-ment of x dollars. Once the property is developed, it is worth significantly more, ory dollars. The “increment” is the difference between the two (y value – x value), andit is the property tax on this increment that is used to pay off the costs of develop-ment. It is like individual homeowners being able to use their property taxes to payoff their mortgage.

11. Net tax capacity is the total property value that can be taxed. When a prop-erty is under TIF, that property provides only general revenue based on the originalvaluation—20 percent of all of Duluth’s property value was under TIF in 1995.Robinson interview.

12. Bradley interview.13. See Minnesota Statutes for 1996, chapter 224, sections 48 and 54 for the full

Corporate Welfare Law. These sections were repealed in 1999 when the CorporateSubsidy Reform Law was passed.

14. Bradley interview.15. Minnesota Alliance for Progressive Action, “Corporate Welfare Activist Hand-

book: A Comprehensive Handbook on Corporate Welfare in Minnesota,” 3d ed.(1999), 2–3.

16. Based on the federal poverty level of $14,996 per year for a family of four,which, assuming a full-time worker, translates into a $7.21-per-hour wage.

17. Anthony Lonetree, “St. Paul Voters Kill Proposal to Tie Aid to Pay; ResultsReflect Citizens’ Renewed Faith in City, Coleman Says,” Star Tribune, November 8,1995, 1B.

18. Ibid.19. Bernie Hesse quoted in Stephanie Luce, “Building Political Power and Com-

munity Coalition: The Role of Central Labor Councils in the Living Wage Move-ment,” April 2000 draft of unpublished manuscript, 10.

20. Personal communications with Twin Cities living-wage proponents. See also“Council Broadens Living Wage Rule, but Many Projects Remain Exempt as CityOfficials Tackle a Wide Range of Issues,” Star Tribune, December 19, 1998, 1B; “Min-neapolis Weighs Policy on Living Wage,” Star Tribune, October 21, 2000, 1B.

21. The original ordinance applied the living-wage requirement (set at $7.25, thefederal poverty line for a family of four) to all businesses receiving $25,000 or morein public subsidies, all workers employed under city service contracts, and all non-union city employees.

22. Corporate Subsidy Reform Commission, “1997 Corporate Subsidy ReformCommission Report,” Representative Karen Clark and Senator John Hottinger co-chairs (St. Paul, February 6, 1998).

23. Personal observation as a commissioner on the Legislative Commission onCorporate Subsidy Reform. See also Rebecca Yanisch, “MCDA RedevelopmentMission Is More Complex than Job Creation,” Star Tribune, December 3, 1997, 18A.Yanisch was the executive director of the MCDA. See also “Council Debates Pro-posed Expansion of ‘Living Wage’ Program,” Star Tribune, September 23, 1998, 5B;“Council Broadens Living Wage Rule,” Star Tribune, December 19, 1998, 1B.

24. Interview with Beth Fraser, current MAPA lobbyist and lead lobbyist on the1999 legislation, St. Paul, 2001.

Coming Together


25. See Minnesota Statute 116.J.993–95.26. MAPA press release, May 19, 1999.27. See Minneapolis Code of Ordinances Title 16, Chapter 422.190.28. Mayor Gary Doty had pledged his support for card check and neutrality for

all new economic development projects while seeking the Central Labor Council’sendorsement during his reelection campaign the previous year.

29. Bradley interview.30. The JOBS NOW Coalition published an extensive report that defined a “mini-

mum family budget” or “real living wage” in 1997 of $28,733 ($13.81 per hour) fora single parent with two children and $21,856 ($10.51 per hour) for a single parentwith one child. This definition is more than double the federal minimum wage andfar above any “living wage” enacted in Minnesota and most cities in the UnitedStates. “The Cost of Living in Minnesota,” a report of the Job Gap, Economic Lit-eracy Project (1998).

31. The 1999 Corporate Subsidy Accountability Law made these changes moot,and, in another example of synergy between the two campaigns, key aspects of the1999 law’s reporting requirements were originally developed during the Duluthcampaign.

32. Bradley interview.33. Greg LeRoy, “Economic Development in Minnesota: High Subsidies, Low

Wages, Absent Standards” (Washington, DC: Good Jobs First, 1999).

Appendix A

Citizen Living-Wage/Corporate-Accountability Campaigns in Minnesota

1995 • Minnesota Alliance for Progressive Action (MAPA) leads a grass-rootseffort to win new reporting for business subsidies requiringbusinesses that receive over $25,000 to set wage and job-creationgoals that must be met within two years.

• ACORN and a coalition of community groups lead an unsuccessfulreferendum to require a living wage of $7.21 per hour for St. Paulbusinesses receiving subsidies.

1996 • Duluth Senior Federation wins requirement of a public hearing andjob creation and wage reporting for all businesses receiving taxincrement financing (TIF) subsidies of $50,000 or more.

• Minneapolis-St. Paul Living Wage Task Force forms.• Governor Carlson vetoes MAPA living-wage provision of $7.58 an hour.• Minneapolis passes a living-wage resolution loosely based on the

recommendations of the Living Wage Task Force for businessesreceiving >$100,000 but exempting “community redevelopment.”

• Duluth activists form the Duluth Living Wage Coalition and beginworking on a living-wage ordinance.

1997 • St. Paul passes a living-wage resolution similar to Minneapolis’s.• Duluth passes first living-wage ordinance requiring living wage of

Peterson


$7.25 per hour indexed to inflation for all businesses receivingsubsidies of $25,000 or more.

• Duluth elects coalition member to city council.• Legislative Commission on Corporate Subsidy Reform created.• Grass-roots citizens’ effort defeats publicly financed Twins stadium.• Hennepin County (Minneapolis) applies prevailing wage

requirement for certain county service contracts.1998 • Corporate Subsidy Reform Bill based on Commission’s

recommendations dies in legislative in-fighting.• Citizen’s Coalition for a Living Wage forms in St. Louis County to

push for a living-wage policy for St. Louis County service contracts.• Minneapolis City Council passes a resolution requiring that

businesses with contracts with the city remain neutral in union-organizing campaigns.

1999 • Duluth Living Wage Coalition wins requirement for city councilapproval of all business subsidies of $25,000 or more.

• Duluth living-wage supporters win three new seats on the citycouncil and now have a majority of councilors.

• MAPA wins passage of Minnesota’s Corporate Subsidy AccountabilityLaw, which requires communities to develop public purpose andwage criteria for business subsidies >$25,000 and requires strongerreporting and claw-back provisions, approval of business subsidiesby a publicly elected body, and public hearings.

• Minneapolis passes Proprietary Interest Protection Resolution thatprovides card check and neutrality agreements for new hoteldevelopments that receive public subsidies of >$100,000.

2000 • Duluth Living Wage Coalition wins strong accountability criteria forbusiness subsidies of $25,000 or more, including a report to thecouncil and public hearing for all subsidies of $25,000 or more.

• Mankato, Minneapolis, and St. Paul pass strong subsidy criteria.2001 • St. Louis County Living Wage Task Force along with the Citizen’s

Coalition unsuccessfully try to pass law raising child-care workers’wages.

• St. Louis County Living Wage Task Force puts forth two resolutionscalling for wage and benefit disclosure for all county servicecontracts and a living wage for certain service contracts.

To order reprints, call 1-800-352-2210; outside the United States, call 717-632-3535.

coming together : promises and pitfalls of minnesota's corporate-accountability campaigns

Documents