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Lobbyists for interest groups representing Minnesota business owners praised those provisions, but said it’s not enough save offset a new burden for smaller employers.
“Ultimately that makes Minnesota less attractive as a place to start and run a business,” said Mike Hickey, director of the state chapter of the National Federation of Independent Businesses. “That hurts all of us because it weakens our economy. ”
Some 22 states have already passed minimum wage increases higher than the federal minimum of $7.25.
Hickey said business owners were particularly concerned about yearly automatic increases.
“It’s not something that should be on autopilot,” Hickey said. Other prominent business groups, including the Minnesota Chamber of Commerce, were particularly critical of the inflation index.
According to the National Conference of State Legislatures, 11 states have adopted indexed minimum wages since 2001. Of those, only one — Vermont — did so by a legislative vote. In the 10 other states, indexing was approved by voters.
Dan McElroy is president of Hospitality Minnesota, which represents restaurants, resorts and lodging businesses. He said the rising minimum wage would likely mean slower growth at businesses he represents, fewer shifts available to workers and a faster move to automate some aspects of kitchen operations.
Still, he said, “We don’t expect a huge loss of jobs.”
At $6.15 an hour, Minnesota’s current base rate is lower than all but two of the 45 states that set their own minimum wage. Once it reaches $9.50, it would be higher than any other state’s current minimum wage, though Washington, which is now at $9.32 an hour, and Oregon at $9.10 both index their wages to inflation. In addition, several states have recently approved minimum wage hikes that will take them above $10 an hour by 2018.
Labor groups and progressive allies who mounted an aggressive public campaign for the increase praised the fruit of their work.
President of SEIU Healthcare Minnesota Jamie Gulley said that a minimum wage hike with inflationary increases “will improve the lives of working families in Minnesota who have been left behind for far too long.” The vast majority of SEIU’s 30,000 Minnesota members already make $9.50 or more per hour.
House and Senate Democrats moved closer Monday to final approval of a new legislative office building, another issue that has divided the party.
Bakk and Thissen denied an explicit deal to swap approval of minimum wage indexing, which House leaders wanted, in exchange for approval of the office building, a priority for Senate Democrats. But Bakk said it removes two major issues Democrats hoped to accomplish this year.
“This session is really starting to come together,” Bakk said.
Staff writer Dee DePass contributed to this report.
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