The legislation would raise the minimum wage for employees of large companies from $6.15 to $6.75 in July. Another dollar increase would come in July 2009. Workers at small companies would see the minimum wage rise from $5.25 to to $5.75 this summer, with another dollar jump next year.
Rep. Tom Rukavina, DFL-Virginia, said the compromise agreement would help the lowest paid workers in the state. In an attempt to gain the support of Gov. Pawlenty, Rukavina said the conference committee eliminated annual inflationary increases in the minimum wage.
"Inflation was his biggest concern, at least the one mentioned first and foremost," he said. "So we took out inflation even though I believe about seven or eight other states have that either built in constitutionally or statutorily into their minimum wage."
But Gov. Pawlenty still has concerns with the bill, and his spokesman said a veto is planned. In a written statement, spokesman Brian McClung said the governor has supported minimum wage increase in the past, but this bill goes too far.
“I'm almost speechless with disgust.”Sen. Ellen Anderson, DFL-St. Paul, on Pawlenty's threatened veto
He said the bill would give Minnesota one of highest minimum wages in the country and hurt small businesses. The governor also wants a credit for high-earning tipped employees.
House Minority Leader Marty Seifert, R-Marshall said he supports the governor's veto threat. Seifert said the minimum wage bill will drive small cafes and hardware stores out of business.
"I had a small business owner that said the last one that passed cost his businesses $60,000 per month in additional costs because of the number of employees they have," he said. "And they said if they have to eat another increase, they're going to close their doors. And that's happening all over Minnesota."
The House passed its minimum wage bill last week. The Senate passed a similar bill a year ago.
After learning of the veto threat, Sen. Ellen Anderson, DFL-St. Paul, called the governor irresponsible and disrespectful.
"I mean, if the governor was going to veto this, he should have told us yesterday when we were negotiating it," she said. "He didn't. He left the door open. He said he was open to signing a bill. And we compromised. We met him more than half way. And now he pulls the rug out from under us. I mean that's just not a decent way to treat legislators or in particular the people of Minnesota who are now to suffer the consequences."
The Legislature could ratify the proposal this week and send it to the governor. State lawmakers last raised the minimum wage in 2005.