Minnesota minimum wage: $9.50 agreement, inflation disagreement - KMSP-TV

EXPLAINER: Minnesota minimum wage negotiations

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A large and vocal crowd of AFSCME members gather outside of the conference committee hearing room at the Minnesota Capitol. Photo by Tim Blotz / Fox 9 News. A large and vocal crowd of AFSCME members gather outside of the conference committee hearing room at the Minnesota Capitol. Photo by Tim Blotz / Fox 9 News.
ST. PAUL, Minn. (KMSP) -

Minnesota House and Senate negotiators have been deadlocked on a minimum wage compromise since the end of last session.

As it stands, the state basically has two minimum wage scales:

$5.25 per hour for small companies
$6.15 per hour for large companies

HIKE TO $9.50 NO PROBLEM, BUT...

There's consensus to raise the minimum wage to $9.50, but the hang-up is indexing the wage to inflation -- the Senate wants no indexing. At the Capitol on Tuesday, the debate played out under the watchful eye of AFSCME union members.


PHOTO: AFSCME members rally for a minimum wage hike

Union members packed a conference committee hearing where Rep. Ryan Winkler (DFL-Golden Valley), negotiating for the House, laid out a compromise on how to grow the minimum wage to $9.50.

THE PLAN: GETTING TO $9.50

For large employers: Winkler is offering an $8.00 minimum wage starting in August 2014, increasing to $9.00 in 2015 and $9.50 in 2016.

For small employers: The minimum wage would start at $7.25 this August and rise to $7.75 by 2016.

Winkler's plan sets the training wage to the same exact scale, but starting in 2017 the rates would rise to inflation.

But key to Winkler's compromise is using a formula that ties inflation to the gross domestic product (GDP), which measure inflation at a lower rate than the consumer price index.

"We're trying to balance out raising the minimum wage with making sure we're accommodating some of the reasonable concerns that business owners night have," Winkler said.


PHOTO: Conference committee meets on minimum wage

RAISING WAGES, CUTTING JOBS?

Naomi Williamson, owner of Sanctuary Restaurant in Minneapolis, argued the $9.50 rate will come at the expense of lost jobs.

"We're going to have to cut back servers' hours," Williamson said. "So what's happening is exactly the opposite of what the unions want and what you want, is that people's jobs are going to be cut back."

FARM EXEMPTION

Another concern is the effect on the farm economy. Part of the compromise laid out Tuesday is not holding agricultural workers to the 40-hour work week.

NEXT STEPS

This plan now goes to the Senate, where leaders will talk about it with their members Wednesday night.

MORE: 8 facts about minimum wage in Minnesota

As it stands, Minnesota's minimum wage is $5.25 an hour for employers with less than $625,000 in annual business and $6.15 for businesses with more than $625,000. The federal minimum wage is $7.25 for employers with more than $500,000 in annual business.

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