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Minimum-wage stalemate: Will Senate accept House indexing offer?

MinnPost photo by Briana Bierschbach
DFL Rep. Ryan Winkler: “It’s difficult at this point to see getting to a minimum wage bill that doesn’t have some kind of indexing in it.”

This is one in a series of articles funded by a grant from the Northwest Area Foundation.

The debate over increasing Minnesota’s minimum wage came back to life on Tuesday after two weeks of inaction, but DFL lawmakers in control of the House and the Senate still have significant disagreements over everything from policy to timing.

Some legislators in the House want to see a minimum wage bill passed well before the end of session, fearing late negotiations over a bonding bill — which requires Republican support to pass – could complicate the minimum wage debate. 

In a packed Capitol hearing room filled with state union members, House lawmakers on Tuesday made the latest offer on increasing the state’s current $6.15 hourly minimum wage for large employers. On major items, there’s little movement.

The House still wants to see a $9.50 minimum wage increase starting in 2016, with indexing of the wage to inflation starting in 2017. But House conferees want to use the so-called “implicit price deflator” to index the wage instead of the standard Consumer Price Index. 

In non-economist terms, that would mean a lower, more stable measure of inflation going forward. House members have also offered to put a 3 percent cap on how much the minimum wage could increase in any given year.   

Indexing has been a sticking point in the negotiations so far, with senators offering to meet the House at a $9.50 level but saying they don’t have the votes to also index the wage to inflation. Last session, DFL lawmakers stalled on a minimum wage deal, with House members pushing for  $9.50 and senators backing an increase to $7.75. Many of the state’s workers make the federal minimum wage of $7.25 per hour.

“It’s difficult at this point to see getting to a minimum wage bill that doesn’t have some kind of indexing in it,” DFL Rep. Ryan Winkler, the author of the House minimum wage bill, said. “Once you pass a strong minimum wage, establish $9.50 an hour as a floor for wages in this state, the very next year it starts to decrease and go down.”

Senate needs 34 votes

The new offer from the House makes a few other concessions. It would eliminate a 40-hour workweek for agriculture employees, which Winkler said was a major provision for the House. The proposal would also define small businesses as those making up to $500,000 in gross sales (the threshold in current law is $625,000). Those businesses could pay a minimum wage of $7.75 by 2016. The same rate would be applied to the training wage.

Without throwing cold water on the offer, senators said they’d review the proposal and come back with a response later in the week.

“There’s some definite compromise in terms of the agriculture workers, which our members will appreciate,” Senate Deputy Majority Leader Jeff Hayden said. He said staff plans to research the implicit price deflator before presenting it to the full Senate DFL caucus at a Wednesday night meeting.

“This is really talking to the members of the caucus that have some heartburn about it and really getting an understanding of what they want to do,” he said.

Hayden acknowledged there are about eight to 10 senators who are concerned about indexing the wage to inflation.

“Today there has been close to that many members who said that that was something they weren’t interested in, was an inflator,” he said. “It was clear that we didn’t have 34 votes for the last proposal, so I’m trying to see if we can get 34 votes for this one, or come back with a proposal with something they can vote for.”

House, unions want vote soon

For some legislators, timing is everything.

Winkler said he would like to see a bill passed before lawmakers start negotiations on a bonding bill, which may be the last thing lawmakers take up this year.

Legislative rules require a three-fifths majority to pass a bonding bill — 81 representatives and 41 senators — meaning it’s one of the few places the Republican minorities have leverage in negotiations. Winkler and others fear if a resolution on minimum wage is delayed long enough, the GOP could try to leverage bonding votes for some kind of deal on minimum wage.

Minimum Wage: Too low or too costly?But Senate Majority Leader Tom Bakk sees less urgency in the timing. No matter when the minimum wage bill passes this session, the law won’t kick in until Aug. 1, he says.

“We had hoped to resolve that in the first couple of weeks. That didn’t get done, and now I think it’s probably on the back burner as we deal with the more immediate pressing things of the committee deadlines,” Bakk said. “Certainly the governor wanted a tax bill by a certain date, and now all the committees are bumping up against deadline, so now I think the emphasis is on the most urgent things that are sensitive to timing.”

Meanwhile, public pressure at the Capitol is intensifying. AFSCME Council 5, the union representing state employees, flooded the Capitol complex Tuesday and rallied in the rotunda for an increase in the wage.

It’s the top priority for unions in the state this session, and they’ve been pressuring senators hard.  They filled the minimum-wage committee room and packed the hallway just outside the door.

“This is a start for a constructive discussion with the Senate on the question of indexing and the other provisions,” Winkler said. “We are trying to address some of their substantive and legitimate concerns on aspects of this bill while not at the same time getting rid of the indexing provision, which we think is crucial to this bill being successful.”

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Comments (5)

  1. Submitted by Gerald Abrahamson on 03/26/2014 - 10:56 am.

    Very easy to do.

    Index to the increases in congressional pay. After all, they do NOT overpay themselves–do they?

  2. Submitted by Robert Gauthier on 03/26/2014 - 03:41 pm.

    Classic Conservative Canard

    That states are too expensive to provide services. Conservative ideology and purpose are not always the same. Most outsourcing and union bashing is to finagle businesses into public services and to decrease competition. Walker did not try to bust unions over benefits, they had already conceded them. Rather it was to allow for profit education companies and charter schools to siphon off tax dollars.
    Mr Tester posts so much that he forgets that he has told the audience here that he is a contractor for the University on several occasions. So take those comments about benefits with a grain of salt. Just like his Conservative buddies, he wants outsourced contracting because he benefits from it.
    The IRS found that tax collections went down significantly with outsourced collectors.

  3. Submitted by Joe Musich on 03/26/2014 - 05:19 pm.

    Union issue ?

    To try to characterize this loathsome puesdo-debate,regarding minimum wage as a union issue is pure poppycock. Most people who will be affected are not even union members. Dare I digress they would undoubted be better off if they were. And for the sake of sisyphus why does the discussion even start with an at best arbitrary number ? How about beginning with what a family needs to live, pay the rent or house payment,transportation and insurance expenses, healthy food and money and time for educational opportunity ? Oops almost forgot physical activity outlet expenses. ! May the we. Would not have to talk about an achievement gap, income inequity, and all the other comics related social ills. Let see some real other then sell centered courage out there

  4. Submitted by Paul Udstrand on 03/27/2014 - 09:50 am.

    Still not a living wage…

    Let’s not lose sight of the fact that this is still a minimum wage, not a living wage. At $9.50 it’s still about $5.00 below living wage, which means the taxpayer will still be subsidizing roughly one third of a minimum wage employees salary. To argue about “indexing” sub living-wage salaries in order to “slow down” or “control” expenses is economically incoherent.

    Somehow someone has arrived the bizarre conclusion that minimum wage workers are not entitled to the “fruits” of THEIR labor. The sole function of such labor apparently is to make someone else wealthier. Regardless of the business climate these employers won’t pay more than they have to, and since these employees have no bargaining power, collective or otherwise, it’s up to someone else to increase the “trickle”. If the MW was still $3.25 an hour, that’s what these employers would be paying, and they’d still be making the same arguments against raising it.

  5. Submitted by John Appelen on 03/27/2014 - 08:41 pm.

    It is also a Union Issue


    If the Mn Min Wage was $3.25, why would the workers stay here? If $7.25 is too low, why aren’t they going where they can make more?

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