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Legislative News and Views - Rep. Glenn Gruenhagen (R)

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News from Representative Gruenhagen 05-03-2013

Friday, May 3, 2013
Dear Friends,
 
It's snowing in May here in Saint Paul, which seems to be a good metaphor for what Democrats are trying to do to Minnesota's economy. The effects of the recent avalanche of new taxes, fees, and mandates is going to have a chilling effect on jobs here in Minnesota, and on our economy as a whole.
 
Minimum Wage Increase
Today we're expected to take up a bill that would increase the minimum wage from its current rate of $6.15 to among the highest in the nation at $9.50. Most Minnesota employees are already earning the federal minimum of $7.25 per hour.
 
A few stats about minimum wage:
  • Just 3.2% of all workers 25-54 years old work minimum wage jobs. Well over half of workers earning minimum wage or less are under 24 years old, of which many quickly move on to a higher-wage job.
  • Studies show that every 10% increase in the minimum wage leads to a 1-3% decrease in employment opportunities for low-skilled and young workers.
  • The proposal we will vote on today is a 31% increase over the federal minimum, meaning there could be a 3-9% drop in employment opportunities for those who already have trouble finding work or teenagers looking for an entry level or summer job to get job experience.
Raising the minimum wage is simply bad policy, and hurts the very people that Democrats are intending to help. It's simple math: when you increase labor costs by 54% (the percent increase from $6.15 to $9.50), you either have to cut hours for employees, lay employees off entirely, or raise prices to compensate for the hit to your bottom line. None of those options are good for anyone in Minnesota. The choice is between fewer jobs, fewer hours, or higher prices. Simply put, it's a lose-lose-lose for Minnesota.
 
Budget Update
This week, members of the House and Senate met to begin working out the differences between the House and Senate budget bills that have been passed over the past few weeks. Once the differences have been resolved, the bills, known as conference committee reports, will be sent back to each of the bodies to be accepted or rejected. If accepted, they will be debated and very likely passed off the House and Senate floor to be sent to the Governor.
 
Unfortunately, this means many of the tax proposals that were dropped by the House and the Governor earlier this session are now back in play: the Senate tax bill includes an expanded sales tax that increases taxes on clothing, baby Tylenol, auto repair services, and more. Worse, their income tax increase reaches all the way down to the middle-class, impacting taxpayers making as little as $79,730.
 
This is in addition to the House bill's sky-high tax and fee increases on everything from alcohol to tobacco to water. I will be sure to keep you updated on the progress of the Conference Committee Tax bill when it comes back to the floor, because it could spell trouble and higher taxes for all Minnesotans.
 
Have a great weekend,

Glenn
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