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Brian Bakst, Associated Press, Published January 10 2013

Minnesota likely to see hike in minimum wage

ST. PAUL – Minnesota’s minimum wage appears primed for a bump for the first time in eight years under legislation introduced Thursday that would automatically boost the rate every year.

A leadership-backed push from new Democratic majorities friendly to the idea makes a minimum wage hike likely to happen. Democratic Gov. Mark Dayton has previously supported increasing it for the estimated 93,000 people now on the bottom pay rung.

Minnesota’s minimum wage is currently $6.15 per hour, though many workers automatically receive the higher federal minimum of $7.25 per hour. Some workers such as babysitters, taxi drivers, nonprofit volunteers and others are exempt from the minimum wage.

Bills introduced in the state House and Senate would lift the hourly wage floor by this summer. A Senate version would set the new rate at $7.50 per hour, while a House plan pushes it to $9.38, both having it take effect in August.

“Whether it’s a teenager in a part-time job or a low-income worker struggling to stretch each paycheck, putting money in the pockets of minimum wage workers is good for the economy,” said Sen. Chris Eaton, DFL-Brooklyn Center. “The money is going to be spent in local businesses, on job training courses and rent.”

Her bill was among the first five introduced in the Senate with backing from leadership. The House also expects to advance minimum wage legislation but not necessarily the one put in play Thursday, said House Speaker Paul Thissen.

“We want to make sure the jobs people have are paying them a wage you can live on,” said Thissen, DFL-Minneapolis.

Minnesota last increased its minimum wage in 2005. Three years later, then-Republican Gov. Tim Pawlenty vetoed a bill for another boost.

Republicans lack the votes to prevent any increase this time, but they hope to prevent the proposal to link future wage increases to the rate of inflation. Both House and Senate proposals would increase the rate every year rather than make them dependent on legislative approval.

Republican Sen. Warren Limmer of Maple Grove said letting the rate rise with inflation will create a “vicious cycle that is hard to get out of” because inflation is partly driven by consumer spending habits.

“We should not be adjusting the minimum wage on an autopilot basis, but after a thoughtful discussion and an analysis of economic conditions,” he said.

Minnesota has had a minimum wage law since 1974, when it was set at $1.80. At the time it was 20 cents more than the federal minimum. Since then it has gone up 12 times, but fallen far behind the national minimum.

A state study released last August found that 6 percent of hourly workers in the state made the minimum in 2011. Almost half of those people, 45 percent, were employed in bars or restaurants where wages are often supplemented with tips. Women were more likely than men to be paid the minimum.

According to the U.S. Department of Labor, 39 states have a higher minimum wage than Minnesota. The highest is in Washington, at $9.19 per hour. Five states – all in the south – have no minimum wage.

Minnesota technically has two minimum wages. Smaller businesses, those with gross sales below $625,000 per year, can pay a lower rate than all other businesses. But the bills would raise that, too.


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