A bill to increase Minnesota’s minimum wage from $7.25 per hour to $9.95 per hour passed its final House committee and could be up for a floor vote in the Minnesota House of Representatives soon. On March 13, 2013, HF 92 passed the Committee on Commerce and Consumer Protection Finance and Policy. The purpose of the bill is to keep minimum wage in pace with increases in the cost of food and other necessary living expenses. If passed, the legislation will require employers to pay employees at least $9.95 per hour by August 2015. After that, that minimum wage would be tied to inflation rates rather than remaining fixed as it is now.
The bill as originally drafted set minimum wage at $10.55, equal to the highest minimum wage in the United States, set in the City of San Francisco. The Committee on Commerce and Consumer Protection Finance and Policy amended the bill to set the minimum wage instead at $9.95, which would give Minnesota the highest state minimum wage in the United States. Presently, Minnesota is one of four states with a state minimum wage that is lower than the $7.25 federal hourly minimum wage. Governor Dayton has stated he supports a minimum wage increase to between $9.00 and $9.50 per hour.
There are currently over 90,000 people in Minnesota who are earning minimum wage. Minnesota’s current minimum wage is $6.15 per hour for large employers and $5.25 per hour for small employers, however most minimum-wage workers in Minnesota are paid at the federal rate of $7.25. During his State of the Union address, President Obama urged Congress to consider an increase in the federal minimum wage to $9.00 per hour. At the current federal rate, a full-time employee earning minimum wage earns a little over $15,000 per year. Under the proposed Minnesota legislation, a full time employee will earn over $20,000 per year.
While supporters of the bill argue that the legislation will keep low-income workers on pace to pay for necessary goods and services, opponents argue that an increase in the minimum wage will slow growth and force layoffs as employers lose the ability to pay employees the higher wage.