On Friday, thousands of Minnesota’s lowest-wage workers will get a well-earned raise. Friday’s increase will bring the new wage to $8.00 per hour – the first increase in the state’s minimum wage in nearly a decade. The minimum wage increase signed by Governor Mark Dayton will raise the wage to $9.50 per hour by 2016, and index it to inflation to help ensure Minnesotans’ wages keep up with the cost of living.
"Minnesotans who work full-time should be able to earn enough money to lift their families out of poverty and achieve the American Dream," said Gov. Mark Dayton. "Raising the minimum wage will improve the lives of more than 325,000 hard-working Minnesotans. I thank the Legislature for recognizing the need to make work pay in Minnesota."
Before Minnesota’s new wage goes into effect, our current wage of $6.15 per hour Minnesota was one of the lowest minimum wages in the nation – lower than neighboring Wisconsin, Iowa, North Dakota, and South Dakota. In fact, Minnesota was one of only four states in the country with a minimum wage below the national rate of $7.25 per hour.
Raising the minimum wage to $9.50 per hour will put an estimated $472 million in additional wages in the pockets of Minnesota’s lowest-wage workers each year. Many economists agree that when minimum wage workers get a raise, they often spend those new wages on basic necessities, goods, and services. That increase in consumer spending is expected to help local businesses in communities across our state, and provide another boost to Minnesota’s growing economy.
Raising the state’s minimum wage is expected to help lift many Minnesotans out of poverty. Under the previous minimum wage of $6.15 per hour, a single parent with two children working full-time earned an annual salary of just $12,792. That is $7,000 below the poverty line. Raising the minimum wage to $9.50 per hour will put another $6,970 in that parent’s pocket, helping them earn more to provide for their family.
The wage increase signed into law by Governor Dayton phases-in over the next several years. To help small businesses, the bill also establishes lower minimum wage requirements for small employers and young workers. And starting in 2018, Minnesota’s minimum wage will be indexed to inflation based on economic conditions to help ensure Minnesotans’ wages keep up with the cost of living.