Friends,
Great news! House and Senate DFL negotiators have finally reached an agreement on a bill raising the minimum wage for most Minnesota workers to $9.50.
It will be phased in by 2016 and indexed to inflation beginning in 2018, helping make sure that workers earning the minimum wage will not fall behind as the cost of living increases in the future.
· For large businesses – those with gross sales more than $500,000 – the rate will increase to $8 in August 2014, $8.50 in August 2015 and $9.50 in August 2016
· For smaller businesses – those will gross sales less than $500,000 – the minimum wage rises to $7.75. It does it in steps as well: $6.50 in August 2014, $7.25 in August 2015 and $7.75 in August 2016. The $7.75 minimum wage rate would also serve as a 90-day training wage for 18- and 19-year-olds. All 16- and 17-year-old workers and employees working under a J1 visa would also earn $7.75.
The agreement stipulates the indexed increase could be suspended for a year by the Commissioner of Department of Labor and Industry if leading economic indicators indicate the possibility of a substantial downturn in the economy. In better economic times, the suspended inflationary increase or a lesser amount could be added back into the minimum wage rate in a subsequent year.
We haven’t raised our state’s minimum wage since 2005. And it is worth noting that when we did, employment actually grew by 1.5 percent from 2005-2006, and average hourly wages rose 67 cents.
The argument that raising the minimum wage is a jobs killer isn’t accurate. What is accurate is that raising the minimum wage will help middle-class families boost the local economy by having more money to spend in the community on goods and services.
Even Dan McElroy, the head of Hospitality Minnesota, had some nice things to say about the bill on Monday. While he still opposes it, he said the protections for smaller businesses and the training wages were good fixes to the original proposal.
We hope to pass this bill and send it to the governor this week.
Dan