President Obama, Minnesota DFLers Push for First Minimum Wage Hike in Years

In his State of the Union address on Tuesday, President Obama called for a raise of the federal minimum wage to $9.  Part of his overall legislative agenda focused on bolstering the middle class, the president’s proposal is good news for America’s minimum wage workers, whose paychecks haven’t increased since 2007.  Unfortunately, the prospects for a federal minimum wage bill making it to the president’s desk seem mild at best, given the split of control in Congress.  The last time a federal minimum wage law was passed, there were two Democrat-controlled houses.

Regardless of the fate of the federal proposal, President Obama’s announcement lends timely support to several states who have made a push in 2013 for minimum wage hikes.  Minnesota is one such state.  In Minnesota, although most employers must pay the federal minimum wage of $7.25, Minnesota’s lowest-grossing employers have been subject to Minnesota’s “basic” minimum wage of $6.15, a rate that has not changed since 2005.  This rate is lower than the minimum wage rates in all other states except Georgia, Wyoming, and Puerto Rico.

Several bills have been introduced in the Minnesota legislature that would raise our state’s minimum wage for the first time in eight years.  One House bill proposes a raise to $9.38; two bills, one in the Senate and one in the House propose a more modest raise to $7.50.  On Wednesday, the day following President Obama’s speech, two DFLers, Representative Melissa Hortman and Senator David Tomassoni, introduced the most progressive bill yet - one that would raise the state’s minimum wage to $9.50.  This latest bill would also tie the minimum wage standard to inflation, triggering automatic increases consistent with the rate of inflation.  With a DFL-controlled Congress, workers’ rights advocates and other proponents of this bill are optimistic that some minimum wage hike is likely this year.  The question will be how much.

In the coming months, you can look forward to hearing the age-old debate over whether a minimum wage hike makes economic sense.  Here are the arguments in a nutshell:  Opponents, including business groups, will claim that raising the minimum wage will kill jobs.  They will also maintain that most minimum wage jobs are not held by heads of households – they are either filled by students or by individuals with more than one job.  Consumers will be harmed too, they will argue, because the additional cost for employment will be passed on to consumers in the form of higher goods prices.  On the other hand, the President and other proponents of a minimum wage hike will note that the current minimum wage is simply not enough money for a worker to live on.  Minnesota’s JOBS NOW Coalition reports that a couple with two children would have to work 155 combined hours per week to meet their family’s basic needs.  Particularly in one of the wealthiest countries in the world, during an era when CEO salaries have soared, proponents of minimum wage hike contend that such a reality is not acceptable.  In addition, proponents note that more money in workers’ pockets translates to a healthier economy, by boosting sales of goods and sales tax revenues.