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Minnesota’s Minimum Wage to Increase on August 1st

7/31/2015 10:14:43 AM

Increase to $9.00 an hour is the second of three increases

ST. PAUL, MN - More than 288,000 of Minnesota's lowest-wage workers will get a raise on Saturday, when the state's large employer minimum wage rises to $9 an hour on August 1st, 2015. In April 2014, Governor Dayton signed a bill into law raising Minnesota's minimum wage for the first time in a decade. This is the state's second of three annual minimum wage increases. The legislation will increase 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 achieve the American Dream, said Governor Mark Dayton. Raising the minimum wage will improve the lives of more than 287,000 hard-working Minnesotans. I thank the Legislature for recognizing the need to make work pay in Minnesota.

Today nearly 300,000 hardworking Minnesotans will receive a well-deserved raise, said Lt. Governor Tina Smith. This is good progress for our state. However, we must continue to build an economy that works for all Minnesotans."

Before the legislation took effect, Minnesota had one of the lowest minimum wages in the nation - lower than neighboring Wisconsin, Iowa, North Dakota, and South Dakota. In fact, Minnesota's minimum wage, at $6.15 per hour, was one of only four states in the country with a minimum wage below the national rate of $7.25 per hour.

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.

"This is good news for Minnesota's lowest-wage workers and will help them earn more to provide for their families," said Ken Peterson, commissioner, Minnesota Department of Labor and Industry (DLI).

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.

How the Law Works - Raising the Minimum Wage

The bill signed into law by Governor Dayton in 2014 phases-in new increases in the minimum wage over several years. To help small businesses, the bill also established 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	$6.15/hour	$8.00/hour on August 1, 2014 $9.00/hour on August 1, 2015 $9.50/hour on August 1, 2016
Small Employer Wage	$5.25/hour	$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)	$4.90/hour	$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

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