Lawmakers Reach Deal to Hike Minimum Wage to $9.50

Updated: 04/07/2014 7:37 PM By: Scott Theisen

DFL leaders in the House and Senate are moving  forward with a bill that could turn one of the nation's lowest minimum wage rates into one of the highest.

The deal struck by House and Senate negotiators will gradually raise Minnesota's minimum wage to $9.50 an hour, up from $6.15 an hour, by 2016.

The issue had been a big bone of contention between the House and Senate for weeks. But on Monday, they announced an agreement, and Gov. Mark Dayton should have a minimum wage bill on his desk by the end of the week.

"No Minnesotan should have to work a 40-hour workweek and have to continue to live in poverty," said House Speaker Paul Thissen, DFL-Minneapolis.

The rise will be phased in -- $8.00 an hour by this August, $9.00 by next August, and then $9.50 in 2016. For smaller businesses -- those with gross sales below $500,000 per year, the minimum wage would hit $7.75 in 2016.

But the wage increase likely won't stop there. The deal links the minimum wage to inflation, meaning it could climb by up to 2.5 percent each year, starting in 2018. There is an exception -- the state could suspend increases in the event of an economic downturn.

"It's a basic Minnesota value that hard work is what it should take to support yourself and to improve your life," said Rep. Ryan Winkler, DFL-Golden Valley.

"We want families to thrive and do well, but you don't do that with minimum wage increases. You do that with a robust, thriving economy," said Sen. Dave Thompson, R-Lakeville.

Republicans are vehemently opposed. And name a significant business group in Minnesota, and they're likely lined up against it as well.

"We don't expect a huge loss of jobs. We expect some slowing of growth. We expect fewer hours, very honestly," said Dan McElroy, executive vice president of the Minnesota Restaurant Association.

Some say the rise could hit the restaurant industry particularly hard.

"If you raise the wages to $100 an hour, and then everyone thinks they're going to still buy a McDonald's hamburger at 79 cents? It doesn't work that way," said John Schiltz, the owner of the Lake Elmo Inn, a restaurant.

In other words, you could see prices on menus going up.

The Restaurant Association wants an our for those who make more than $9.50 an hour including tips, like wait staff, allowing those workers to stay at the current minimum wage level. But right now, that's not in the deal.

There is an exception for 16 and 17-year-olds, who could be employed below the new minimum wage, at $7.75 in 2016.

The House and Senate are both expected to vote on the bill in the next few days.