Thousands of Minnesota workers get a minimum wage raise today

Minnesota's 114,000 minimum-wage workers will receive a pay raise today, when employers boost their hourly wage by 75 cents to $8 an hour.

The pay boost will help workers like Abera Siyoum, a 35-year-old immigrant from Ethiopia who works full time at the Twin Cities airport. Using an electric golf cart, he helps elderly and disabled travelers navigate miles of carpeted concourses.

Until Thursday, Siyoum earned the federal minimum of $7.25 an hour. He said the extra cash -- plus earnings from a part time job as an office security guard -- will help him support his wife and two children.

"It's a good start," he said. "It's not a lot of money, but still it helps us out, for groceries."

Siyoum hopes to finish an accounting degree that he started in Ethiopia. But if he's still earning minimum wage next year, his pay will rise to $9 an hour, then $9.50 in 2016. Three and a half years from now, the rate will track with inflation.

Labor and other advocacy groups began pushing for a higher minimum wage last year, when Democrats took control of the Minnesota legislature. But it took them until this year to pass a bill because of disagreements over how much to boost the wage floor.

The raise is long overdue, said Susie Brown, public policy director for the Minnesota Council of Nonprofits.

"We think that it's going to be helpful to individuals and their families," Brown said. "And we think that makes Minnesota a place where people are more able to thrive and have opportunities and attain success."

Polls have shown broad support for the higher minimum wage. But opponents say it will wreak havoc on business balance sheets. Some restaurant owners have been especially vocal because Minnesota is one of seven states where workers who earn tips must still be paid the full minimum wage.

Restaurant owner Tom Tomaro said he supports the minimum wage in principle. But he wants state legislators to include a so-called tip credit that would allow employers to pay workers who make tips a lower minimum wage.

With tips, Tomaro said, his servers already earn at least $12.50 an hour and often much more. He said having to raise their pay leaves less in his budget to pay non-tipped employees.

"As that wage continues to increase it makes it very hard for us to compensate our back-of-house, which are the kitchen staff or our managers, because in fairness we run out of money across the board when that wage continues to creep up," he said.

Anticipating Minnesota's minimum wage increase, Tomaro opened a third eatery, the Smilin' Moose in Hudson, Wis., where he can pay his tipped workers less. Tomaro said he'll probably sell his Minnesota restaurants.

Other business owners could follow his lead.

But economist Louis Johnston of Saint John's University doesn't expect a mass exodus. He said moving a business is expensive.

Contrary to some fears, Johnston said, data from other states with higher minimum wages than Minnesota's indicate there'll be little change to the state's overall economy.

"What it will do is it'll affect the people right there who are both paying the wage and who are receiving the increased wage," he said. "That's where things are going to get adjusted."

Johnston said the biggest benefit of Minnesota's new minimum wage is that it'll follow inflation starting in 2018. That, he said, will give a measure of predictability to both employers and workers.