ST. PAUL — A majority of southeast Minnesota's senators opposed a proposal on Wednesday to raise the minimum wage to $9.50 per hour by 2016.
Sen. Dan Sparks, DFL-Austin, was among three Democrats who voted against the bill. He said he was concerned about the effect on border communities of raising the minimum wage so dramatically. The minimum wage in Iowa and Wisconsin is set at the federal minimum wage level of $7.25 per hour.
"I continually expressed concerns that it was potentially going too high, too fast," Sparks said.
The Senate approved the measure on a 35-31 vote. Five of the region's six senators voted against the bill: Sen. Vicki Jensen, DFL-Owatonna, Sen. Jeremy Miller, R-Winona, Sen. Carla Nelson, R-Rochester and Sen. Dave Senjem, R-Rochester. Sen. Matt Schmit, DFL-Red Wing, cast the lone "yes" vote. He said the Senate worked hard to negotiate a compromise that will ultimately provide more certainty for businesses and limits the effect on small businesses.
"It's certainly going to be a shot in the arm for workers. It is going to mean that work will pay in Minnesota," Schmit said.
The Minnesota House is expected to vote on the minimum wage bill on Thursday.
Minnesota now has one of the lowest minimum wage rates in the nation at $6.15 per hour. Under the DFL plan, the minimum wage increase would be phased in starting with $8 per hour by August 2014, $8.50 by August 2015 and $9.50 per hour in 2016. The deal includes a lower minimum wage rate for small businesses — $7.75 per hour for businesses with fewer than $500,000 in gross sales in 2016.It also includes a youth minimum wage of $7.75 per hour for 16- and 17-year-olds.
The bill indexes the minimum wage to inflation beginning in 2018. But it also give the Commissioner of the Department of Labor and Industry the ability to suspend the inflationary increase for a year if economic indicators show an economic downturn is on the horizon.
The measure has the strong backing of labor unions, who argued that a minimum wage increase was long overdue and would help more than 350,000 low-wage workers in the state.
Business groups said the proposal went too far and would hurt border communities and lead to fewer jobs. The Rochester Area Chamber of Commerce emailed an "action alert" in advance of the Senate vote, urging members to contact lawmakers and ask them to oppose the DFL measure in favor of raising the wage to the federal level of $7.25 per hour.
Sen. Gary Dahms, R-Redwood Falls, offered an amendment to the bill that would replace the $9.50 per hour increase with the federal level of $7.25. It failed to pass.
Nelson supported the Dahms amendment and said the $9.50 level is simply too high and will put the state at a "distinct disadvantage" over its neighbors. She added that the Democrats' plan is a prime example of legislative overreach.
"Yes, poverty is real and we should look at lifting people out of poverty, but, members, this is not the way to do this," she said. "The best way to lift people out of poverty is through skills, skill training."
Miller shared Nelson's concerns and said he was disappointed that Democrats were not willing to offer a minimum wage proposal that could win bipartisan support.
"I voted no based on the feedback I've heard from constituents," he said. "There were a lot of concerns about increasing the minimum wage to $9.50 per hour and having the automatic inflator on it."
Sen. John Marty, DFL-Roseville, said that while the minimum wage increase isn't going to solve the plight of the working poor, it is a big step in the right direction.
"That (minimum wage increase) is going to make a difference not for dozens of people nor hundreds of people, but hundreds of thousands of Minnesota families. And that's critically important."