As one of only four states below the federal level, lawmakers are looking to raise Minnesota’s minimum wage.
With three bills this legislative session so far, and more likely to come, Democratic-Farmer-Labor Party legislators want to raise the state’s minimum wage to at least $7.50 — 25 cents above the federal level — and upward of $9.38.
Proponents cite a stronger economy as a reason to raise the current $6.15 level, while opponents say it will lead to inflation of goods.
The state’s basic minimum wage is $6.15, but federal law requires all employers grossing over $500,000 to pay the minimum $7.25, the assumed minimum level for most businesses in the state.
University of Minnesota global studies freshman Matt McGilvray works for minimum wage at Bruegger’s Bagels in Dinkytown. He said the money he makes at his job isn’t enough to pay for rent or other expenses.
“It would definitely be great to get a raise in pay,” he said.
Under state exemptions, some small businesses in the state pay their employees $6.15 per hour, less than the standard.
“Some folks make less than minimum wage,” said Sen. John Hoffman, DFL-Champlin, who is authoring a bill to meet the federal minimum. “Now what we’re saying is we value minimum wage as a baseline of this community, and hopefully it will help it grow as well.”
Jay Kiedrowski, a senior fellow at the University’s Humphrey School of Public Affairs, said this isn’t the first time Minnesota lawmakers have discussed the state’s lowest pay wages.
For the last decade, he said, conservative Republicans have blocked any legislation for modifying the state’s minimum pay.
“Opponents of minimum wage would argue that the price of goods would go up and that would slow economic activity,” Kiedrowski said. “Proponents would argue that this is just the cost of doing business, and prices might go up, but that’s not going to change the basics of economic activity.”
This session, with a DFL-led Senate and House and a DFL governor, the bills are getting more consideration.
The bills haven’t had a hearing yet but are set to be looked at further in committee meetings later this month.
“It’s embarrassing for Minnesota’s minimum wage to be so low,” said Rep. Joe Mullery, DFL-Minneapolis, whose proposed bill would increase the wage to $9.38 per hour.
Washington has the highest minimum wage in the country, at $9.19.
“If you look at states with a high minimum wage, usually they have a good economy,” he said. “Like Washington has the highest in the country and the state of Washington is doing pretty good economically.”
Mullery said if the state increases the minimum wage, fewer people will be below the poverty level, which means they wouldn’t need as much assistance from the government.
“If a person is working a full-time job for today’s minimum wage, they can’t meet the barest of necessities, and taxpayers have to make up for it,” Mullery said. “In essence, taxpayers are subsidizing companies that pay their employees minimum wage.”
The minimum wage conversation is one many legislators are having in hopes of boosting the economy while the state faces a predicted $1.1 billion budget shortfall in the next biennium.
“The best spending for the economy is not government spending but spending by working families,” said Hoffman. “Fixing Minnesota’s budget includes things like this.”
McGilvray said higher pay would help him with school expenses, like textbooks.
“It would be nice,” said global studies and German junior Brittany Hanes, who also works at Bruegger’s. “I might actually be able to pay my rent without having to work two jobs as a student.”
Hoffman said people working at this level are mostly in the service industry.
Most businesses around the University pay above minimum wage, but Alex Ragaller, a shift leader at Jimmy John’s in Dinkytown, said they have a few employees who work at minimum wage.
“This [legislation] would be an equalizer for minimum wages in Minnesota,” Kiedrowski said. “In other words, if Burger King has to increase its minimum wage, so will McDonald’s, so there is no competitive advantage or disadvantage for one or the other.”
Mullery said various unions and coalitions will propose to legislators that the minimum wage be raised above $10.
Rep. Ryan Winkler, DFL-Golden Valley, said they will discuss minimum wage, as well as unemployment and income inequality, in the Select Committee on Living Wage Jobs — a House committee he chairs which will hold its first meeting Monday.
“There are a number of bills that will be introduced related to minimum wage, so there is a good conversation to be had about what the right level is,” Winkler said.
At a hearing in February, economic experts and legislators will discuss a targeted level for the state’s minimum wage and its economic impact, he said.
“This helps close the gap between what Minnesota has in the books right now and the federal level,” Hoffman said.