Raising minimum wage to $9.50 per hour will improve the incomes of 357,000 working Minnesotans across the demographic spectrum. It would also improve the incomes of 202,000 working women.
If we would have indexed Minnesota’s first minimum wage in 1973, $1.80 per hour, it would be approximately $9.50 today. Indexing minimum wage to $9.50 allows low-wage workers to catch up and keep up. We also need to protect tipped workers from having their wages cut by not allowing tip-penalty language to be added to the minimum wage bill.
Big businesses say indexing minimum wage is equivalent to an autopilot. It’s important for our legislators to understand that freezing minimum wage is also an autopilot. Do legislators want to erode the purchasing power of the minimum wage every year? Or do they want to maintain it through indexing? The indexing included in House File 92 represents the minimum of what is necessary if the minimum wage is to keep pace with the cost of living. Under indexing, the minimum wage will grow by approximately 17 cents per year in 2017 and 2018.
Businesses have been threatening that companies will move out of the state and businesses will be forced to lay off workers because of indexing and a higher minimum wage. But currently Washington state has a minimum wage of $9.32 per hour, and they have indexed to inflation since 1998. They are beating the U.S. in job growth. Indexing ensures the minimum wage keeps up with the cost of living. We don’t freeze the price of groceries and gas. Why should the minimum wage be frozen? Without indexing, minimum wage will lose value every year. Indexing the minimum wage gives both employers and employees predictability.
Improving the minimum wage will improve economic security for 137,000 children whose parents are low-wage earners. It will also increase annual consumer spending power in Minnesota by $472 million.
Numerous states raised their minimum wages higher than the federal level during the 1997-2007 period, when the federal minimum wage remained stuck at $5.15. Research by the Fiscal Policy Institute and others showed that states that raised their minimum wages above the federal level experienced better employment and small business trends than states that did not.
This isn’t just about a decent wage. This is about the quality of our state. Right now we rank among the four lowest state minimum wages, with Arkansas, Georgia and Wyoming. Minnesota can do better. This is about lifting people out of poverty. This is about personal dignity, giving workers the opportunity to provide for their families and pay their bills. Minnesota needs to do this, and with your help we can get this done!
– Bobby Kasper is president of the St. Paul Regional Labor Federation, AFL-CIO.