Minnesota's Minimum Hourly Wage Jumps to $8.00 Friday
ST. PAUL, Minn. – For the first time in nearly a decade, Minnesota's minimum wage is on the rise, with the first phase kicking in tomorrow (Aug. 1). The initial increase will boost the minimum hourly pay for an estimated 350,000 workers by 75-cents to $8.00.
Those who opposed the hike have warned the added cost for employers will mean higher prices and lost jobs, but state Rep. Ryan Winkler (DFL–Golden Valley) is convinced the increased minimum wage will bring economic benefits for those working families and for Minnesota.
"What happens is that workers get more money," says Winkler. "Most of them will be spending that money immediately, back in the economy. Consumer spending increases and the economy actually does a little bit better with a higher minimum wage."
Following Friday's increase, the wage will rise to $8.50 an hour next year, and $9.50 an hour starting in 2016. Future increases from there, explains Winkler, will be automatic and linked to inflation, with a cap of 2.5 percent.
"So, in 2017, the state has to calculate the rate of inflation for Minnesota in the preceding year," he says. "And then, a new increased minimum wage will go into effect January 1, 2018, based on an inflationary increase from $9.50."
The higher minimum only applies to Minnesota companies with sales of more than $500,000 per year, and it does not cover 16- and 17-year-old workers, who will remain under the federal minimum of $7.25.
The Minnesota Department of Labor and Industry has a two-page Guide to Minnesota's Minimum Wage Law online that summarizes this year's change.