Minimum wage raise is final

It’s official: 325,000 Minnesotans will get a raise. This afternoon, Governor Dayton signed House File 2091, the bill increasing the state minimum wage, into law.

The increase is long overdue. The previous minimum wage was not enough for many workers to support their families or escape poverty. But as a result of the minimum wage increase, 325,000 Minnesotans will have higher wages. This will make it easier for working families to make ends meet. And it’s good for our economy, as these workers have more to spend in their local communities.

The new minimum wage begins phasing in over a two-year period:

  • Large employers: $8.00 per hour starting on August 1, 2014, $9.00 starting on August 1, 2015, and $9.50 starting August 1, 2016.
  • Small employers: $6.50 per hour starting on August 1, 2014, $7.25 starting August 1, 2015, and $7.75 starting August 1, 2016.
  • Training wage (for employees ages 18 and 19 for the first 90 consecutive days of employment): $6.50 starting August 1, 2014, $7.25 on August 1, 2015, and $7.75 on August 1, 2016.

Two other wage tiers are created:

  • Youth wage (workers under age 18): $6.50 starting August 1, 2014, $7.25 on August 1, 2015, and $7.75 on August 1, 2016.
  • Hotel or resort workers under an Exchange Visitor non-immigrant visa for summer work who receive a lodging or food benefit: $7.25 starting August 1, 2014, $7.50 on August 1, 2015, and $7.75 on August 1, 2016.

For purposes of the minimum wage, Minnesota will match federal definitions for small and large employers. A large employer has annual gross sales over $500,000, and a small employer has gross sales below that amount.

Minnesota’s minimum wage will increase each year based on inflation starting in 2018 (commonly called “indexing”), so that it keeps up with the cost of basic necessities. The annual increase cannot be more than 2.5 percent. The state has the option of suspending an annual increase if economic indicators show potential for a substantial downturn in the state’s economy. In the years after a wage increase is prevented, the state can make supplemental increases in the minimum wage to catch up.

This new law will help thousands of working Minnesotans – especially people who are often left behind in the economy, including women and people of color. It will make sure these workers benefit from the economic growth they help create.

-Caitlin Biegler

About Clark Biegler

Clark Biegler is the Minnesota Budget Project's policy analyst.
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