Minnesota minimum wage rise nears approval

Legislation to increase Minnesota's minimum wage to $9.50 an hour and allow for inflationary increases in future years is a vote away from making it through both chambers.

The state Senate passed the measure today by a vote of 35-21. If approved by the House, Gov. Mark Dayton intends to sign it into law.

With the current rate of $6.15 unchanged since 2005, Democrats said the increase is long overdue for low-wage workers. But Republicans warned that the higher wage will lead businesses to cut jobs.

The bill calls for increasing the minimum wage for large employers gradually to $9.50 by 2016. A large employer is one that tops $500,000 in annual gross sales. The hourly rate for small employers would gradually increase to $7.75 by 2016. All employers could pay teenage workers a $7.75 training wage for up to 90 days.

The chief sponsor of the newly crafted compromise bill, state Sen. Jeff Hayden, DFL-Minneapolis, said he represents many people who would receive a raise.

"Those dollars are going to go directly back into the community."

"One of the things that we know about low income people is that don't have savings. They usually can't make it to the end of the month, and that's why a lot of the programs we have are to help them," Hayden said. "So, I know that the dollars that the employers will have to expend to give low-income people a raise. I think that those dollars are going to go directly back into the community."

The inflationary increases would begin in 2018, with an annual cap of 2.5 percent. The commissioner of the Minnesota Department of Labor and Industry would make the yearly adjustment, and could also suspend it in a given year if there's an economic downturn. The commissioner would also have the authority to make up that lost ground when the economy rebounds.

State Sen. Senator Scott Newman, R-Hutchinson, said the Legislature would be shirking its constitutional duty with that provision.

"The commissioner is going to decide whether or when or if the automatic inflator is going to be utilized." Hutchinson said. "Not the Legislature, the executive branch. I believe it is our responsibility."

Most the Republican criticism focused on how the increase would affect businesses. They tried unsuccessfully to amend the bill with a top rate of $7.25 rather than $9.50. Senate Minority Leader David Hann said he believes the increase is too big and too fast.

"There will no question be people who will lose their job. No question about it."

"There will be a benefit; some people will gain more in wages," said Hann, R-Eden Prairie. "But there will no question be people who will lose their job. No question about it. There's just not any kind of doubt. Any kind of reasonable economic analysis will say when you do this -- this dramatically, this quickly -- you will do some disruption to the economy and you will lose jobs."

State Sen. Sean Nienow, R-Cambridge, said restaurants already are moving to computerized ordering as a way to reduce their serving staff.

"I can't support a bill that will put thousands of people out of work, that will prevent thousands of people from getting a job," Nienow said. "Because they won't exist."

Three rural DFL senators -- Vicki Jensen of Owatonna, Lyle Koenen of Clara City and Dan Sparks of Austin -- voted with Republicans against the bill.

State Sen. John Marty, DFL-Roseville, said he wished the bill had strong bipartisan support. Marty said he knows that $9.50 an hour will be a big step forward for many low-income people who are struggling.

"That is going to make a difference, not for dozens of people or hundreds of people, but for hundreds of thousands of Minnesota families, and that's critically important," Marty said.

State Sen. Chris Eaton, DFL-Brooklyn Center, said the minimum wage is an important issue for women.

"We are going to support the bottom line of the poorest people, the working poor in our communities," Eaton said. "Three-quarters of those workers in the 10 largest low-wage occupations are women, and 137,000 children are in those households."

The bill now goes to the House, where a vote is expected Thursday.