All Minnesotans can agree that a fair day’s work deserves a fair day’s pay. Unfortunately, hundreds of thousands of hard working Minnesotans, earning at or near the $7.25 per hour minimum wage, do not make enough to support themselves or their families.
In fact, when you factor in housing, food, transportation and other necessities, a single adult would need to earn $11.82 per hour to meet their basic needs. That rate goes up to $14.03 per hour for a family of four with two working parents.
Even worse, Congressional and Legislative inaction has caused the minimum wage to lose value year after year. In 1968, the federal minimum wage had its highest buying power. We would need to raise the minimum wage to $10.55/hour to match that level today. Living on minimum wage is hard enough; having it lose value each year because of politicians’ failure to act just adds insult to injury.
When people work hard and still don’t earn enough to meet their basic needs, they are usually forced to utilize public assistance. This means that taxpayers are actually subsidizing employers who aren’t paying their workforce a fair wage.
There is a better way. The Minnesota Legislature is considering legislation that would increase Minnesota’s minimum wage to $9.95 per hour over three years and ensure it keeps value by tying future increases to inflation.
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Critics of increasing the minimum wage have recently been making doomsday predictions about what it would do to business. However, their dire predictions couldn’t be further from reality.
Minimum wage increases do not cost jobs. Minnesota’s last minimum wage increase was in 2005. Over both of the next two years the state showed a net increase in jobs. Given how dismal the state’s job creation figures were for the last decade, the net gains from 2005 to 2007 are even more impressive than they sound. After all, for six of the ten years between 2001 and 2010, Minnesota lost jobs.
An increase in the minimum wage would also mean low-wage workers could be part of Minnesota’s economic recovery. When wages go up, business profits go up. For every $1 increase in the minimum wage, there is a boost in consumer spending by a low-wage workers’ household by $2,800 over the following year. That’s good for business and our overall economy.
Some bar and restaurant owners are also lobbying to pay their tipped employees less by enacting a tip penalty. Just like gubernatorial candidate Tom Emmer claimed in 2010, they say tipped workers are rolling in cash.
While servers may make above the minimum wage in some pay periods, most are not employed in expensive restaurants. The median wage for servers in Minnesota (including tips) is actually just $8.84 per hour.
They claim that with a tip penalty, they would be able to pay kitchen staff more. In reality, cooks and kitchen staff in the four states surrounding Minnesota (where there is a tip penalty) are paid less than in Minnesota.
A fair day’s work deserves a fair day’s pay. Legislators haven’t addressed this issue in eight long years. An increase is long overdue. Now is the time to make work pay and to ensure it keeps paying for working Minnesotans. Let’s increase the minimum wage and do it right.
The Minnesota AFL-CIO is a labor federation made up of more than 1,000 affiliate unions, representing more than 300,000 working people throughout the state.
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Shar Knutson
President, MN AFL-CIO
