Minnesota's minimum wage will begin to climb this summer, and could keep climbing every year after that, now that Gov. Mark Dayton has signed a bill that includes automatic increases tied to inflation.
Surrounded by legislators and some of the workers who will soon receive a raise, Dayton signed today the state's first minimum wage increase since 2005. The current rate of $6.15 will move in stages over the next two years to $8, $9 and $9.50 for large employers and to $7.75 by 2016 for small employers.
Dayton said the increase will help low-wage workers survive.
"We're doing what Democrats do best. We're reaching out to people who work hard, who need the help, who shouldn't have to have a minimum wage in order to get paid a decent wage, in order to get paid a living wage," Dayton said in remarks that at times sounded like a campaign stump speech.
The governor said the increase will help low-wage workers survive. "People who work as hard as people do should get paid enough money to be able to achieve the American dream, and that's what they want to do," he said.
The annual increases begin in 2018, with a yearly cap of 2.5 percent. The commissioner of the Minnesota Department of Labor and Industry can suspend an increase for a year in the event of an economic downturn.
Republicans vow to block increases
Most of the Republican candidates trying to unseat Dayton this fall have said that if elected they would try to prevent those increases.
After details of the DFL-backed bill were announced last week, two Republican gubernatorial candidates went to the same podium to criticize the increase and warn about its impact on jobs. State Sen. Dave Thompson, R-Lakeville said as governor he would work to rescind the increase and suspend the annual indexing.
"I don't think it's a good idea to index the minimum wage to inflation," Thompson said. "Look, we all want people to have good jobs and earn more money and we want families to thrive and do well. But you don't do that with minimum wage increases. You do that with a robust, thriving economy."
State Rep. Kurt Zellers, R-Maple Grove, similarly pledged to block the increases.
"We all want people to have good jobs and earn more money and we want families to thrive and do well. But you don't do that with minimum wage increases."
"Yes, indexing especially. That is probably one of the most dangerous things you can do," Zellers said. "Looking at surrounding states, none of them are going to do that. You look at where the job expansion is, they don't have indexing in their states."
Other GOP candidates also are willing to prevent indexing.
Hennepin County Commissioner Jeff Johnson described the provision as "terrible policy" and an abdication of responsibility. Johnson said he too would make use of the process for suspending an annual increase.
"I don't read it as saying that the governor just gets to decide on a whim whether to suspend an increase or not," Johnson said. "I think it requires some economic indicators. But I would certainly take advantage of that. Under the letter and intent of the law I would certainly take advantage of that."
Another Republican, former state Rep. Marty Seifert of Marshall, said he wouldn't want Minnesota's minimum wage rising too high, too quickly.
"I haven't read the specific language in the bill on how the mechanism works," Seifert said. "But if we are above and beyond every single state in the United States, I would probably be pretty hesitant to implement that."
A campaign spokeswoman for another GOP candidate, businessman Scott Honour, said he was not available for an interview.
Democrats doubt threat
The new law allows an administration to make up the lost ground from a suspension once the economy improves. That's why the chief House sponsor of the bill, state Rep. Ryan Winkler, DFL-Golden Valley, said he doesn't think a Republican governor would actually follow through with the threat.
"In order to suspend an increase, the first thing they would have to do is admit that the economy is going down," Winkler said. "Then they would have to have a public hearing and face the workers in this state who actually would benefit from the increase. And third of all, they would know that a future Democratic administration would likely get to replace that inflationary increase anyway. So, there wouldn't be much gain in doing it."
The minimum wage numbers appear to be favorable for the Democrats who supported the increase. An estimated 350,000 people will get a raise. And a recent KSTP/Survey USA poll found 61 percent of the Minnesotans surveyed approved of the increase to $9.50.
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