RAISING MINIMUM WAGE WILL BE GOOD FOR OUR ECONOMY

May 16, 2005

Here in Minnesota, we value hard work. That's why I was so glad to see us reward people working on the lower end of the wage scale with a long overdue increase in the minimum wage.

As of August 1, 2005, the minimum wage will increase from $5.15 an hour to $6.15 an hour for most minimum wage earners. This will mean an increase in pay for 128,000 low-wage workers, 73 percent of whom are over the age of twenty.

This is a matter of fairness for low-wage workers. The buying power of the current minimum wage has decreased 20% since the last increase, and even with the increase, the minimum wage still falls short of a living wage. But the increase sends a message to those low-wage workers that we value the work that they do. This will provide some additional income to those who need it most. They, in turn, will spend it on the essentials in life, providing a boost to the economy. Over the past few years, 14 states have increased their minimum wage above the rate of the federal minimum wage. Of those states, over half are outpacing the national average for job growth.

The bill does recognize that an increased minimum wage could pose a challenge for some of Minnesota's small businesses that struggle on tight profit margins. In order to eliminate any unintended negative consequences, the bill allows businesses with annual gross sales of $625,000 or less to pay a minimum wage of $5.25 an hour.

The passage of the bill was truly an example of how working on a bipartisan basis and agreeing to compromise can help move along policies that are good for the citizens of Minnesota.