Viewpoint: It's time to look critically at Minnesota's minimum wage
Last week was minimum wage week at the Capitol. The Select Committee on Living Wage Jobs has been hearing testimony from businesses, economic policy experts and members of the workforce on raising Minnesota's minimum wage.
I am proud to sit on the Select Committee on Living Wage Jobs as I believe that job creation and economic recovery are some of the most important issues facing our state. In addition, I believe that we can and should work to make jobs better across the state and in our community. The Select Committee on Living Wage Jobs exists to make hard work pay for all Minnesotans. Just because someone is employed does not mean that they are able to pay the bills. We are working to address this disparity.
Minnesota's minimum wage has fallen behind both nationally and regionally. Our minimum wage for large employers is $6.15 and the minimum wage for small employers is $5.25. The federal minimum wage is $7.25, and there is talk of raising this wage at the National level. To clarify, many Minnesotans are making the federal minimum wage of $7.25, however for jobs not covered by federal law, Minnesota businesses are only required to pay the lower amount.
I have always thought of Minnesota as a national leader in employment, but I am learning that we have a long way to go to catch up with other states. Of states that have a minimum wage, only Georgia and Wyoming are lower than Minnesota. North Dakota, South Dakota, Iowa and Wisconsin all match the $7.25 federal minimum wage and only three other states have a state minimum wage that's lower than the federal wage. Six states have no minimum wage and Minnesota is 45th in the nation in minimum wage. These are not statistics to be proud of.
As we consider ways to improve low-wage jobs, we can look to see what other states have done. Eighteen states and the District of Columbia have minimum wages higher than the federal minimum wage and 11 states have state minimums that automatically change with the federal rate. Nine states have indexed their minimum wage to inflation or cost of living and we are considering this method in Minnesota. This would mean as the costs of goods or services go up, so do wages. If we adjusted the 1979 minimum wage of $2.90 for inflation, it would be $10.24 today.
Raising the minimum wage will boost the economy and help working families make ends meet. Minnesota last raised the minimum wage eight years ago, in 2005, and this did not lead to job losses. Employment grew 1.5 percent from 2005-2006, and average hourly wages rose $0.67. As many as 600,000 Minnesotans will benefit from an increase in the minimum wage. This will boost the local economy as families have more money to spend in the community on goods and services.
A common myth is that low-wage earners are teenagers looking to make spending money. However, many low-wage workers have children and/or some level of higher education. Fifty-eight percent of Minnesota workers earning $7.25 or less are between ages 20 and 64, and 15 percent of these people are married.
A product of the recession has been that many college graduates now work in jobs that require only a high school diploma. Low-wage workers are older and better-educated than ever, and while unemployment is getting better, underemployment is substantial and continues to persist. We must take action to improve wages for these Minnesotans.
As we all know, the costs of health care, a mortgage or rent, groceries, fuel, and transportation add up quickly -- not to mention the costs of raising children. I think we can all agree that expecting families to live on $6.15 an hour is not reasonable in today's economy.
As we work to address minimum wage issues at the Capitol, I encourage you to contact me directly with your input. I can be reached by phone at (651) 296-7807 or by email at firstname.lastname@example.org. I look forward to hearing from you.
Ward, a Woodbury Democrat, represents House District 53A