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Minimum wage increase will help families, communities

Fri, Aug 1st, 2014
Posted in All State of Minnesota

By Ken Martin, chairman, Minnesota DFL

People earning a minimum wage are people we depend on to care of our children and our elderly and disabled family members, yet they do not make enough money to care for their own families. Some are working two to three jobs or try to provide for their children’s basic needs.

Because someone working 40 hours a week should not live in poverty, Gov. Mark Dayton and DFL legislators have increased the minimum wage. The first phase of the three-phase increase takes effect Friday, Aug. 1, marking the first wage increase in 10 years.

The Aug. 1 increase brings the wage from $6.15 an hour (the fourth-lowest in the U.S.) to $8 an hour. Further increases in 2015 and 2016 will boost the wage to $9.50 an hour for large employers. (By 2016, small businesses with $500,000 in gross sales, will raise their minimum wage to $7.75 an hour.) Beginning in 2018, all wages will go up annually on Jan. 1 by inflation, unless the commissioner of the State Department of Labor and Industry decides the economy cannot support an increase.

More than 350,000 Minnesotans will be impacted by this wage increase. While some may have the misconception that minimum wage earners are teenagers with part-time jobs, the fact of the matter is that 274,000 of the 350,000 are working adults, age 20 and older. A large majority of those workers, 202,000, are women.

With so many adults earning minimum wage, the increase will also provide economic security for about 137,000 children of low-paid workers. Studies have shown that cchildren from families with sufficient financial resources are far more likely than children from economically disadvantaged families to start kindergarten ready to succeed and to flourish in school and later in life.

Communities will also benefit from the increase in the minimum wage. When the $9.50 an hour wage goes into effect, it is estimated it will provide a $472 million boost in consumer spending. When low-wage workers have more money to spend, it is anticipated they will purchase more consumer goods for their families. The increase they receive will go right back into our economy. Higher wages have also shown to provide businesses with lower turnover, higher productivity and better customer service.

For low-wage workers, an increase in the minimum wage means a chance to being the process of working their way out of poverty. The increase in the minimum wage is another example of how DFL leaders are committed to improving the lives of working people and their commitment to building a Better Minnesota for all, not just a select few.

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