Today's economy is often characterized as the "K-shaped economy" because of the divergent nature of many trends (similar to the upward and downward sloping arms of the letter "K"). The post-pandemic increase in worker power that started to reverse decades of rising inequality has stalled. A stock market boom created more wealth for high-income households, while lower-income households have struggled with inflation, layoffs, and slowing wage growth. Higher-income individuals feel confident and continue to spend, while others struggle with being able to afford housing, groceries, health insurance, and travel. Uneven economic opportunities for women and members of marginalized groups is also an enduring problems.
The business sector also paints a mixed picture. Corporate profitability appears strong, but this masks differences between digital-heavy companies that can easily scale up compared to brick and mortar businesses in manufacturing, utilities, and health care. Larger companies have increasingly outperformed smaller companies. Investments in AI infrastructure have been a boon for some technology companies, while business investment in other sectors has stagnated. Uncertainty around AI, tariffs, interest rates, central bank independence, immigration policy, the global economic environment, and political polarization has caused many companies to pause hiring, if not reduce their headcounts. Future economic growth is likely to be modest, and largely driven by certain sectors. But if inflation isn't brought under control and other disruptions emerge, stagnate growth and stagflation could be quite harmful to many workers, families, and businesses.
There has been a significant backlash against immigrants in the United States and around the world. It is illegal for companies to hire undocumented workers (those without proper work authorization), but some employers hire immigrant workers to keep labor costs low. In the Twin Cities hospitality industry, estimates of the fraction of the workforce that are immigrants are as high as 35 percent. It is estimated that the hospitality industry is the largest employer of not only immigrant workers, but also of welfare-to-work program participants and single parents.
On the public policy front, legislatures in red states have enacted right-to-work laws and other policies favorable to business, while in blue states there have been numerous union and activist-led campaigns (such as Fight for $15) to enact worker-friendly policies. In recent years, Minneapolis enacted city ordinances creating a city minimum wage higher than the federal and state minimums, and requiring employers within the city to provide paid sick leave. The owner of The Zinnia used her political clout in Minneapolis to have the hotel classified within a special Minneapolis economic opportunity zone. This means that The Zinnia is subject to a $15 minimum wage (which it is already paying), but it is exempt from any city-mandated inflationary increases in the minimum wage, and it is also exempt from the Minneapolis sick leave ordinance.
However, the State of Minnesota has since enacted (1) its own statewide "Earned Sick and Safe Time" (ESST) law, and (2) a "Minnesota Paid Leave" program for workers who need time off to care for themselves or a family member. The "economic opportunity zone" designation does not apply to state law. However, because the paid family leave policy is a statutory benefits program whose possibility was anticipated in previous negotiations, the contract is already in compliance (section 17.3). (Note: a statutory benefits program means that benefits are paid from a state fund supported by payroll taxes, similar to unemployment insurance. The payroll tax for the Minnesota Paid Leave progam is 0.88% of wages). However, in this round of bargaining for a new collective bargaining agreement, The Zinnia must become compliant with the Minnesota ESST law.
Accounting Department
Balance Sheet
Departmental Expense Statements
Hospitality Industry Background
HR Department
Labor Market Analysis
Getting Started training video and handout
Contract Proposal Worksheets (Word / Google doc)
Costing Program (Excel / Google sheet)
Internal Memos
(Restricted Access)