House, Senate agree on minimum wage increase
ST. PAUL -- Legislative leaders agreed to raise the Minnesota minimum wage to $9.50 an hour in 2016, with lower wages for small businesses, those undergoing training, teens and some foreign workers.
The deal announced today includes a provision that beginning in 2018 all wages would increase each Jan. 1 to match inflation, but the state labor commissioner could suspend an increase if the economy is failing.
Full House and Senate votes are expected before lawmakers begin an Easter-Passover break on Friday.
Democrats who control the House and Senate praised the deal. Republicans and business leaders panned it.
"This is a good day for Minnesotans," House Speaker Paul Thissen, D-Minneapolis, said in announcing the agreement.
The House had wanted an automatic increase for inflation, but Senate leaders were concerned. Senate Majority Leader Tom Bakk, D-Cook, said that allowing the labor commissioner to stall automatic increases was a good compromise.
The Senate leader also said that phasing in the new minimum wage over three years is a good idea.
"I think we have a pretty strong provision for small businesses," Bakk added.
Businesses with gross sales less than $500,000 annually will have a $7.75 minimum wage when it is fully implemented in 2016.
The agreement also allows large businesses to pay $7.75 for a 90-day training wage for 18- and 19-year-olds, for all 16- and 17-year olds and for some employees from other countries working at places such as resorts.
Mike Hickey of the National Federation of Independent Businesses predicted job losses if the bill is enacted.
Dan McElroy of Hospitality Minnesota said he does not expect many restaurant workers to lose their jobs because of the measure, but predicted continued higher meal prices than in neighboring states that count tips as part of wages. McElroy said he will continue to lobby to include tips in the minimum wage.
The most vocal legislative proponent of a minimum wage, Rep. Ryan Winkler, D-Golden Valley, said that despite an improving economy, many Minnesotans still struggle. He said they will have more money to spend, which will help businesses. He said studies show that raising the minimum wage does not hurt business.
Minnesota's current minimum wage is $6.15, but most businesses fall under the federal $7.25 figure.
President Barack Obama wants to raise the federal wage floor to $10.10, but Republicans who control the U.S. House do not plan to go along with it. The president is taking steps to raise the minimum wage in areas where he has control, such as when the federal government hires private contractors.