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Governor Dayton Enacts First Minimum Wage Increase in a Decade

April 14, 2014

First raise since 2005 will bring Minnesota’s minimum wage to $9.50 by 2016

ST. PAUL, MN – More than 325,000 of Minnesota’s lowest-wage workers just got a raise. Joined in the Capitol Rotunda this afternoon by legislators, advocates, and hard-working Minnesotans from across the state, Governor Mark Dayton signed a bill into law raising Minnesota’s minimum wage for the first time since 2005. The bill (HF2091/SF1775), which passed in the House and Senate last week, increases the minimum wage to $9.50 per hour by 2016, and indexes it to inflation to 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 through hard work and additional training, achieve the middle-class American Dream,” said Governor Dayton. “Raising the minimum wage to $9.50, and indexing it to inflation, will improve the lives of over 325,000 hard-working Minnesotans. I thank the Legislature for recognizing the need to make work pay in Minnesota.”

The eyes of the nation were on Minnesota today, as Governor Dayton signed the bill into law. President Barack Obama, who has been leading the charge to raise the nation’s minimum wage, congratulated Minnesota today on taking action to improve the lives of hundreds of thousands of hard-working families.

“I applaud Governor Dayton and the Minnesota Legislature for increasing their state’s minimum wage and giving more hardworking Minnesotans the raise they deserve,” said President Obama.

Before today, at $6.15 per hour Minnesota had 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.

But DFL leaders in the Minnesota Legislature set out to change that this session. The bill’s lead authors, Rep. Ryan Winkler and Sen. Jeff Hayden, said today’s action will make work pay again in Minnesota, helping hundreds of thousands of Minnesota families get a little closer to fulfilling the promise of the American Dream.

“We believe that all Minnesotans deserve the dignity of supporting themselves and their families through hard work,” said Rep. Winkler. “Raising the minimum wage and indexing it to inflation is an important step to create a rising floor for all wages that will benefit hundreds of thousands of Minnesotans who work hard and deserve to get ahead.”

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.

“Today represents a big step forward for low-wage workers in our community,” said Sen. Hayden. “We rely on these workers every day, yet many of them cannot support their own families. Raising the minimum wage is part of a larger effort to lift up the working poor and ensure all Minnesotans have the opportunity to earn enough to get by.”

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.

How the Law Works – Raising the Minimum Wage
The bill signed into law today by Governor Dayton phases-in new increases in the minimum wage over the next several years. To help small businesses, the bill also establishes lower minimum wage requirements for small employers and young workers. The following chart provides more details and a timeline describing how the new law will be implemented over the next several years. Starting in 2018, Minnesota’s minimum wage will be indexed to inflation to help ensure Minnesotans’ wages keep up with the cost of living.

Provision Previous Law
New Minimum Wage Law
Large Employer Wage
$8.00/hour on August 1, 2014
$9.00/hour on August 1, 2015
$9.50/hour on August 1, 2016

Small Employer Wage
$6.50/hour on August 1, 2014
$7.25/hour on August 1, 2015
$7.75/hour on August 1, 2016

90-Day Training Wage (18 and 19 years old)
$6.50/hour on August 1, 2014
$7.25/hour on August 1, 2015
$7.75/hour on August 1, 2016
Youth Wage (Under 18 years old)
No youth wage   
$6.50/hour on August 1, 2014
$7.25/hour on August 1, 2015
$7.75/hour on August 1, 2016
Indexed to Inflation
No inflationary increases
Indexing begins January 1, 2018

More information can be found on the minimum wage fact sheet.