News Column

Coalition Wants $9.50 Minimum Wage

October 14, 2013

Trey Mewes, Austin Daily Herald

economics penny jar

Oct. 14--A coalition of labor, political, religious and financial groups are calling on state legislators to raise Minnesota's minimum wage to $9.50 per hour, though local business leaders aren't sure the proposal will help the economy.

The Raise the Wage Coalition is touring the state to persuade the public to support a minimum wage increase during the next legislative session. Research done by the coalition suggests a minimum wage increase would help women and workers of color in particular, and could bring an additional $470 million in spending power to state residents based on data from the state Department of Employment and Economic Development, and the Economic Policy Institute.

"A lot of people think minimum-wage workers are teenagers, and the data basically shows that that's not the case," said Joe Sheeran, a coalition spokesman and communications director for think-tank Minnesota 2020. Sheeran said 77 percent of residents who would be affected by a minimum wage increase are 20 years old or older.

A state minimum wage increase is likely to take place next year, as the issue was brought up in the waning days of this year's legislative session. House and Senate Democrats couldn't agree on an increase to the current $6.15 an hour in Minnesota, as the House proposed $9.50 an hour while the Senate pushed for $7.75, or about 50 cents higher than the federal minimum wage.

Critics say such a minimum wage increase could increase costs across the board, including increases for managers and workers who already make more than the suggested $9.50 minimum wage, and may push businesses out of the state. Local business officials say a minimum wage increase is to be expected but they hope the state Legislature keeps wages in line with the $7.25 federal minimum wage rate.

"The marketplace should decide the wages," said Sandy Forstner, Austin Area Chamber of Commerce executive director.

Forstner said an arbitrary wage increase would add expenses for businesses that are likely already dealing with increased costs in other areas.

Raise the Wage officials have found many businesses with a large pool of minimum-wage workers have larger energy and transportation budgets, which means the added spending power from a $9.50 minimum wage increase would likely offset increased costs.

"For the majority of businesses that have a high percentage of low wage workers, that's the case," he said.

Rep. Jeanne Poppe, DFL-Austin, serves on the joint committee that will consider a minimum wage hike, though she isn't convinced a $9.50 minimum wage increase is best for Minnesotans.

"We've got other things that might suffer the consequences of doing that," she said.

Poppe said the issue may be too complex for a simple wage increase, and legislators will have to determine whether to tie an increase to inflation or whether to put in automatic increases among other issues.

Sen. Dan Sparks, DFL-Austin, introduced a bill to mirror the federal minimum wage during the last legislative session. He was unavailable for comment as of press time.


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Original headline: Coalition wants to raise minimum wage to $9.50

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Source: (c)2013 the Austin Daily Herald (Austin, Minn.)

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