Minnesota Becomes Fifth State to Hike Minimum Wage in 2014

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Pedro Rodriguez, right, talks with Andrus Reyes as they participate in a demonstration on a Burger King parking lot as part of a nationwide protest supporting higher wages for workers in the fast-food industry and other minimum wage jobs in Boston, Thursday, Dec. 5, 2013. (AP Photo/Stephan Savoia)

Pedro Rodriguez, right, talks with Andrus Reyes as they participate in a demonstration on a Burger King parking lot as part of a nationwide protest supporting higher wages for workers in the fast-food industry and other minimum wage jobs in Boston, Thursday, Dec. 5, 2013. (AP Photo/Stephan Savoia)

With Congress deadlocked and incapable of addressing mounting economic inequality, cities and states are doing what they can to pick up the slack.

On Friday, the Minnesota House approved raising the state minimum wage to $9.50 per hour. According to the National Employment Law Project (NELP), it’s the fifth state to hike the minimum wage this year, following  Delaware, West Virginia, Connecticut and Maryland, which just approved its hike earlier this week.

Two aspects of the Minnesota bill make it especially helpful for low-wage workers. First, there is no carve-out for tipped workers — they will be paid the same minimum wage as everyone else and any tips they make on top of that are (forgive the pun) gravy. As Saru Jayaraman, co-founder of the Restaurant Opportunities Centers United, told Bill Moyers last week, the federal minimum wage for tipped workers is just $2.13 per hour, as it has been since 1991, because tips are considered part of income, even though they are random and often meager.

Saru Jayaraman on restaurant workers' raw deal.

Second, Minnesota’s minimum will now rise automatically with the cost of living. That means it won’t lose its value over time. If the federal minimum wage — which hasn’t been raised since 2009 — had been indexed to inflation, it would have stood at $10.74 last year rather than $7.25.

According to a statement by NELP, “More states are expected to approve minimum wage increases in the coming weeks.”

Yesterday, the Vermont House approved a bill to increase the state’s minimum wage to $10.10 per hour, with a parallel bill expected to pass the state Senate in the weeks ahead. On Tuesday, the Hawaii House approved a bill to raise the state’s minimum wage to $10 per hour, which now heads to the state Senate for final consideration.

Measures to raise the minimum wage are also expected to appear on the ballot this November in a number of states across the country, including South Dakota, Alaska, Michigan, and Arkansas.

A growing number of localities have also raised their minimum wages significantly above the federal and state level. Cities and counties that have enacted higher minimum wages in recent years include San Francisco ($10.74 per hour), Santa Fe ($10.66 per hour), San Jose ($10.15 per hour), Washington, DC ($11.50 by 2016), Montgomery County, MD ($11.50 by 2017), Prince George’s County, MD ($11.50 by 2017), and SeaTac, WA ($15 for certain occupations).

Last Month, Chicago voters overwhelmingly passed an advisory referendum to raise the minimum wage to $15 per hour for the city’s largest employers, and the Richmond, CA City Council just approved an increase to $12.30 per hour. Other cities that are pursuing higher minimum wages include Seattle ($15 per hour), San Francisco ($15 per hour), New York City, San Diego, Oakland, Portland, ME, and Las Cruces, NM, to name a few.

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  • Anonymous

    Excellent. Let experimentation continue with various levels of minimum wage based on local conditions.

    We will see over time if the higher minimum wage in some places improves the economy, jobs, poverty, etc.

    That is much better than a one size fits all, with no opportunity to observe the impacts of the raises.

  • JonThomas

    “That is much better than a one size fits all, with no opportunity to observe the impacts of the raises.”

    Raising the minimum wage is not an experiment. It has been done many times since it’s inception, and the sky has yet to fall.

    However, what has crashed the economy has been greedy individuals and corporations who have sought to enrich themselves and their investors while paying their lower earning workers less than a living wage.

  • Anonymous

    Nope. Minimum wage has been, by and large a one side fits all federal government construct.

    It is only now that we will be able to see what happens if say in Massachusetts Elizabeth Warder gets the troops to pass a $15 minimum wage, while say CT and NY stay at $8-$9.

    Or what happens if Illinois passes a $12 minimum wage while Indiana stays at $7.50.

    This has never been done before and we don’t know what will happen.

    Will the jobs from Massachusetts and Illinois flow to Connecticut, NY and Indiana? Will the cost of living for Massachusetts and Illinois increase faster than in the other states?

    Let the experiments begin.

  • JonThomas

    Dude, States and municipalities have long had differing minimum wage amounts.

    Haven’t you ever been a laborer?

  • Anonymous

    Dude, please tell me, before, 2009 what was the highest differential between minimum wages in the country? (hint: less than $1).

    It is only now that we are talking about meaningful different. We have Elizabeth Warren saying that $15/hour is a beautiful thing. Let her state of Massachusetts try it before we impose it on the entire USA and crater our competitiveness vs China even further.

    If jobs flow to Massachusetts, then other states will quickly copy it. If jobs flow out or cost of living gets out of control and people flee the state, then the harm is contained

    Face it. You are scared of the experiment. Would you really like to see your state enact a $15/hr minimum wage?

  • JonThomas

    I do not accept the premise of your phrasing.

    As President Roosevelt proffered in 1933, the minimum wage was intended to be a living wage… a minimum living wage for ANYWHERE in the country.

    Therefore, I have no problem with a $15 minimum wage in Massachusetts, where I live, or anywhere else.

    I am not fearful of any supposed results. One thing is certain, the cost of living in some states is higher than others. It is not an “experiment” to return the living wage back to what it once was when this country THRIVED… A nation-wide LIVING WAGE.

    The experiment, which has failed by the way, was the minimum wage freeze mindset that this country experienced through the 80′s and 90′s and is only now finally, after seeing the horrible results of massive foreclosures and increases in homelessness, being rectified.

    The Minimum Wage has been held down for far too long and this country has suffered.

    The Federal Minimum Wage was the amount that 1 working family member needed to earn and support a family. Now it couldn’t support a chipmunk!

    Please stop characterizing myself and those who disagree with you as ‘scared’ or fearful simply because we disagree with your comments!

    That is trollish behavior!

    I notice that you ignored the comment about being a laborer. Are you commenting on a subject about which you have no actual experience, yet claiming some special insight?

    Have you actually had to live and support a family on minimum wage?

    Not raising the minimum wage is racing to the bottom to compete with China! Sorry, but with the contrast of transportation, labor, and other fixed costs between the U.S. and China, there is no competition!

    There is no way the U.S. can ‘compete’. Face it, the world has changed. The U.S. can only LEAD by setting high standards for itself and it’s citizens.

    The only reason that Chinese products are in demand is because U.S. consumer buying power has been reduced by low wages. People can only afford cheap, shoddy merchandise.

    Raise the Minimum Wage and watch cottage industry, great quality merchandise return! Watch people start spending more on quality products. Watch small business once again thrive!

    It is not an ‘experiment to return to what worked when the U’S’ economy was robust. It is a failing experiment to keep wages low and profits high!

    From your comments on this and other articles, it sounds like you want to make sure you have a serfdom to serve your whims.

    Sorry, but there are no ‘Barons’ here! The founders of this country would have sent you packing with the rest of the nobility-worshiping tories. People who are defending the plutocratic class are a blight upon the prosperity of this nation, and life sucking parasites upon the nation and humanity as a whole!

    Again, to raise the Federal Minimum Wage is NOT an experiment. To have different rates from locality to locality is not an experiment… it is a step, by step return to the principles of community and fairness!

  • GregoryC

    Competitiveness with China? Would you like to travel to China and visit the former-working class American jobs? China is raising their standards of living and soon jobs will leave China for lower-wage nations like Vietnam. Of course, those corporate wage costs saved are not passed along to American consumers, but to CEO-suite compensation, board directors and maybe, shareholders. But not customers.

  • Arm of Keaau

    I laud these states and cities for making these changes, but don’t forget they’re only catching up to progressive states like Washington, Oregon, and others that started this movement years ago. (_: FBI

  • http://plus.google.com/+OleOlson novenator

    This was a harder fight than it should have been. We control both chambers of the legislature and have the governor’s chair, but the more conservative DFL Senate really dragged it’s heels. Eventually the bill was watered down slightly (enacted by 2016 instead of 2015, and not pegged to inflation until 2018), but it’s a good first step. I hope we can do it again in a year or two and up it to $12/hour.

  • Anonymous

    Well the Minnesota economy is doomed now. I live across the state line in Wisconsin and I’m sure our economy will be booming as a result. Of course our college drop out governor is nowhere near the 250,000 jobs he promised to create when he ran 4 years ago.

  • fmendoza

    THE PEOPLE ALL ACROSS THE UNITED STATES ARE TAKING THE LEAD. IN INSUREING THAT THEIR STATES WILL STEP UP TO THE PLATE. AND RALLY AROUND. A LIVING WAGE. THE ULTIMATE GOAL WOULD BE A $15 MINIMUM WAGE. BUT EVERY INCREASE FROM $7.25 TO $10-$15 DOLLAR MIN. WILL HELP THE LOCAL ECONOMY COME BACK FROM RECESSION. AND AT THE SAME TIME LIFT MILLIONS OUT OF POVERTY. I’M EXSTREMELY IMPRESSED BY THE FACT THAT MINNISOTA’S MINIMUM WAGE INCREASE ALSO INCLUDED AN AUTOMATIC COST OF LIVING INCREASE. I’M LOOKING FOWARD TO THE OTHER STATES THAT ARE FIGHTING FOR THE LIVING WAGE. ASK AND YOU SHALL RECEIVE.

  • Anonymous

    My last sentence was a tip that the first 2 were sarcasm.