Indexing Minnesota’s minimum wage for inflation a divisive issue for DFL legislators

MinnPost photo by Briana Bierschbach
Rep. Ryan Winkler thinks indexing the wage to inflation is still on the table, but he’s open to discussion on some kind of a solution with the Senate.

It’s only the second week of the 2014 legislative session, but Democratic lawmakers are already in the middle of intense negotiations over how to implement a likely minimum wage of $9.50.

Members of the House and Senate minimum wage conference committee traded offers Tuesday evening, with the issue of indexing the wage to inflation emerging as the key sticking point in negotiations.

House Democrats feel strongly that the wage should automatically increase over time, but Democrats in the Senate insist the bill will fail in the upper chamber if the provision is included.

“There is no circumstance under which the Senate is going to do inflation,” Senate Majority Leader Tom Bakk said as he followed the proceedings. “They can sit there until the snow melts — it’s not going to happen. We have checked with our members and we don’t have the votes for that.”

On Monday night, both sides settled on raising the wage to $9.50 per hour for large employers by 2016. Currently, Minnesota’s minimum wage stands at $6.15, although most workers are covered under the federal minimum wage of $7.25.

Senators say their willingness to move up to $9.50 was a huge concession for their caucus, which barely passed a bill last session to raise the wage to $7.75 per hour.

House Democrats originally wanted the minimum wage to hit $9.50 by next year with indexing to start in 2016. They now want indexing to start in 2017.

“It was a really heavy lift to get ourselves to $9.50 and the House has given that no consideration at all,” Bakk said, adding that it took months to move his caucus to that number. “That didn’t mean anything, and there’s not another move on our part.”

The two sides appear to be talking little and positioning themselves for the sort of politicking usually reserved for the final days and hours of the legislative session.  Neither side believes the other is immovable in its position.

“It would be hard for me to imagine a bill without some kind of regular adjustment,” DFL Rep. Ryan Winkler, author of the House version, said after the hearing. “But I’ve talked to a lot of imaginative people.” 

“If you want to insist on a negotiating point, you always make sure your side doesn’t have the votes,” he added.  

For Winkler’s part, he says he thinks indexing the wage to inflation is still on the table, but he’s open to discussion on some kind of a solution with the Senate.

There are other provisions the Senate would like to see in the final bill. They include: a $7.25 youth wage for those under 18, a $5.15 training wage, a $7.25 wage for people who sleep while they work (such as group-home and long-term-care providers who are paid to sleep overnight at a home) and retention of the $5.25 minimum-wage requirement for small employers. The original House proposal didn’t include a youth wage or a sleeping wage. 

Lawmakers stayed away from other sticky issues such as parental leave and wage exemptions for agriculture workers.

Senators want to pass a bill that only raises the wage to $9.50 by 2016, but House Democrats want to deal with all the provisions on the table in one proposal.

Winkler said he will consider those options, including the indexing question, and will make a counter-offer as soon as Wednesday. He tried to end the evening on a positive note.

“I’ve heard lots of different rumors about where different people are and what they believe about different issues, and I think a substantive discussion about what we think is the right thing to do for the state is where we need to be,” Winkler said. “Hopefully, as a group of Democrats, we can get that done together.”

Comments (7)

  1. Submitted by Frank Phelan on 03/05/2014 - 10:05 am.

    Social Security

    The minimum wage, like the salaries of all elected officials, should be tied to the annual increase in Social Security payments.

    Keep it simple, stupid.

    • Submitted by Dennis Tester on 03/05/2014 - 09:28 pm.

      Do you even know

      where the money comes from to pay wages in the private sector? Unlike the government’s source of income, its *earned* and doesn’t just fall from the sky.

  2. Submitted by Beth-Ann Bloom on 03/05/2014 - 10:36 am.

    progress

    Nice to see all the work going into making sure that full-time workers can earn a livable wage.

  3. Submitted by Hugh Gitlin on 03/05/2014 - 04:27 pm.

    How about adjusting regularly

    But not annually.

    Maybe an adjustment every 3 years.

  4. Submitted by Dennis Tester on 03/05/2014 - 09:24 pm.

    Would it be too much to ask

    to require state legislators to pass a course in basic economics? Good grief these people are clueless about how the real economy works.

  5. Submitted by Bill Gleason on 03/06/2014 - 11:41 am.

    Courses in basic economics …

    Reverence for textbook economics always amuses me. When I was a lad I took an econ course from a very bright young Englishman at Northwestern.

    His favorite phrase was “ceteribus paribus.” Which the hoi polloi were supposed to figure out meant all things being equal.

    The problem with textbook economics is that it is a great oversimplification. If text book economics were some sort of science, like physics, we wouldn’t be in the economic mess we are in right now.

    Real economics is a combination of some general principles plus a lot of crowd psychology. Think of the famous guns/butter example. We can have so many guns or so much butter – there it is in this dandy equation.

    But what if we live in a country that thinks war, in general, is bad? Or butter is bad for you? Or even worse for the gunsel types, that guns are bad and we should have fewer of them?

    So let’s quit trying to use textbook economics to support naive theories on unemployment, the minimum wage, or Keynes vs. Hayek, shall we?

    The naiveté of such arguments should be obvious to anyone who actually took an introductory course in economics – and was paying attention.

  6. Submitted by Pat Berg on 03/07/2014 - 07:49 am.

    Indexing

    News reports keep talking about legislators who oppose any kind of indexing, but I haven’t seen a lot of discussion on “Why?”.

    What is wrong with *some* appropriate form of indexing? Is the argument about which form that should be, or about any kind of indexing at all?

    And do we really want to keep returning to these legislative battles periodically rather than just building in a mechanism that ensures minimum wages keep pace with the times?

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