Democrats who control the Minnesota House and Senate are likely to try to raise the state’s minimum wage in next year’s legislative session, leading legislators say, the latest of about a half-dozen efforts to increase it over the last two decades.
The state House this year passed a measure to raise the minimum wage to $9.50 by 2015, which would make Minnesota’s one of the highest minimum wages in the nation. But the state Senate passed its own version of the bill increasing the wage to $7.75 an hour, meaning negotiators from the two chambers will need to iron out their differences before a wage hike can go into effect.
Senate Democrats say they worry that hiking the minimum wage too much might harm small businesses and dampen the state’s business climate. But state Rep. Ryan Winkler (D), sponsor of the House version, said that “shows the success of the supply-side view of the universe, if Democrats are even repeating the same talking points” as business interests.
Currently, Minnesota’s minimum wage stands at $5.25 for employees of companies that gross less than $625,000 in sales annually, and at $6.15 for employees at larger companies. Most workers in Minnesota earn the higher federal minimum wage of $7.25 an hour.
Despite its progressive reputation, Minnesota has long had one of the lower minimum wages in the nation. In 1968, the lowest-paid workers earned just 70 cents an hour, a lower rate than any state other than Kentucky, according to the U.S. Department of Labor. The last time the legislature raised the minimum wage, in 2005, the lowest-paid workers went from earning $4.90 an hour to the current $5.25 rate.
Winkler said Minnesota has a lower-than-average share of the workforce earning minimum wage, meaning there may not have been the same sense of urgency to increase the low wages.
But not for lack of effort. Democrats in the state legislature tried to boost that rate at least five times between 1994 and 2008. Gov. Arne Carlson (R) vetoed a minimum wage hike three times, in 1994, 1996 and 1997. Gov. Tim Pawlenty (R) signed the current rate into law in 2005, but he vetoed another increase in 2008.
Now that Democrats hold significant 12- and 11-seat majorities in the state House and Senate, respectively, and with Gov. Mark Dayton (D) in office, the political winds favor a wage increase.
“There is momentum clearly on the DFL side of the aisle after these last twenty-plus years to get minimum wage through, but they just haven’t had a governor who’s as receptive as Dayton has been,” said Eric Ostermeier, a political scientist at the University of Minnesota.
A part of the reason for the lower-than-average wage is that Minnesota is one of just seven states that do not include a so-called tip credit, Ostermeier said. A tip credit allows employers to pay a lower wage if employees make up the difference in gratuities, like those waitstaff at restaurants might earn. All six of the other states without tip credits are Western states.
The legislature will meet for a short session beginning February 25, 2014. By that point, Winkler said, he hopes the legislature takes up the increase in quick order.