Push to raise minimum wage continues

Minnesota’s hourly rate is lower than the federal wage of $7.25.
October 29, 2013

Some state legislators are planning to push this season to raise Minnesota’s hourly minimum wage, despite failed attempts last session.

Supporters say the increase would spur economic growth, while opponents say it would disrupt how businesses in the state operate.

Rep. Ryan Winkler, DFL-Golden Valley, is leading legislative efforts to raise the rate to $9.50 per hour. He said the increase would cause money in the state to circulate better, benefiting businesses.

Last session, a bill that would have raised the state minimum wage to $9.50 per hour passed the House. The Senate approved a companion bill that would have raised the wage to $7.75 per hour.

But the legislation stalled because legislators couldn’t agree on a single increase before the deadline.

If the legislation passes next session, Minnesota would be on track to have the highest minimum wage rate in the country.

Currently, the state’s minimum wage is $5.25 for small employers and $6.15 for those making more than $500,000 per year.

However, most minimum wage earners work for the federal rate of $7.25 per hour, because employers don’t meet certain criteria, like operating only in Minnesota and reporting annual profits less than $500,000.

Rep. Greg Davids, R-Preston, who opposes the effort, said some employers wouldn’t be able to hire as many workers or provide quality service if the state’s minimum wage was raised.

“[Employers] can’t afford $9.50 an hour. Some of them are on very small margins, so people aren’t going to get hired,” he said.

University of Minnesota neuroscience junior Tyler McNeal, president of the student group American Citizens for Economic Freedom, also said that increasing the state’s minimum wage would change how businesses hire.

“It’s going to block the people who have really low skill sets from getting jobs,” he said.

Employers set their pay scales to reflect the quality of work required from each employee, McNeal said. If those pay scales were raised, he said, businesses would have to require a higher quality of work to match the higher pay rate.

About 93,000 workers in Minnesota were paid at or below the federal minimum wage between August 2010 and July 2011, according to a report from the Minnesota Department of Labor and Industry.

Davids said Minnesota wouldn’t seem attractive to businesses if the rate increased, because it would be cheaper to operate in neighboring states.

Changing the law would be like having “signs all around Minnesota saying ‘Don’t come here,’”  he said.

Second-year University graduate student Brandon Madsen, an officer for the University’s Socialist Alternative Club, supports the increase.

He said it would take more than a wage increase to force businesses out of Minnesota.

“A lot of these jobs are in the service sector, and so it’s easier said than done to just pick up and move,” he said.

Socialist Alternative is involved in a nationwide push to raise the federal minimum wage to $15 per hour.

In order to provide for a family of four, Winkler said, two adults would each need to work full time for $14 per hour.

Legislators on the House’s Select Committee on Living Wage Jobs have been discussing the issue statewide by hosting public forums, said Winkler, who chairs the committee.

He said the committee will use community input to advise the Legislature next session during the bill’s reviewing process.

 

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