Hodges, Coleman team up for $9.50 minimum wage in Minnesota

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Mayors push for $9.50 minimum wage in Minnesota by 2015

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Tim Blotz | Fox 9 News Tim Blotz | Fox 9 News
ST. PAUL, Minn. (KMSP) -

Minneapolis Mayor Betsy Hodges, St. Paul Mayor Chris Coleman and several other mayors from the Iron Range to the metro teamed up Thursday at the State Capitol to support raising Minnesota's minimum wage.

The ultimate goal is to raise minimum wage to at least $9.50 an hour with increases for inflation.

"This has gotta happen and it's gotta happen right now," Falcon Heights Mayor Peter Lindstrom said.

As it stands, Minnesota's minimum wage is $5.25 an hour for employers with less than $625,000 in annual business and $6.15 for businesses with more than $625,000. The federal minimum wage is $7.25 for employers with more than $500,000 in annual business.

Read more: 8 facts about minimum wage in Minnesota

Hodges and Coleman spoke at "Minnesota Mayors for Raising the Minimum Wage" ahead of the legislative session after similar efforts failed last year. City councils in Minneapolis, St. Paul and Duluth are expected to officially call on the legislature to enact a minimum wage of at least $9.50 indexed to inflation, and other municipalities are encouraged to follow suit.

"Minneapolis enjoyed a strong recovery from The Great Recession, but we know that many people were left behind," Hodges said. "We have some of the largest gaps in the country between the haves and the have nots, and that includes a gap in wages. Our city, our state and our country need to do something to address the soaring inequity. Raising the minimum wage is crucial to ensuring that people who work for a living, can make a living."

Lindstrom pointed out that last time Minnesota raised minimum wage was the year YouTube started.

"The world has changed," Lindstrom said.

The push to raise the wage comes in conjunction with a new study on low-income workers released by the state's Labor Department. The study used Bureau of Labor statistics that show Minnesota's 2013 minimum wage was 30 percent below what it was in 1974 when adjusted for inflation. That report also estimates that 83,000 Minnesota workers make minimum wage or less. Additionally, it estimates that hourly, minimum-wage workers account for 10.5 percent of those living at poverty level or below. For the Mayor of Hibbing, that's the real issue.

"My friends, my neighbors -- even my wife," Rick Cannata said. "She's been at minimum wage for a while."

According to Minnesota's Raise the Wage Coalition, a $9.50 minimum wage would provide a raise for 357,000 Minnesotans, boosting their purchasing power by $470 million.

Studies from progressive think tank Minnesota 2020 show in Minneapolis, the minimum wage hike would affect about 30,000 workers bringing nearly $40 million in additional purchasing power.

In St. Paul, 20,000 minimum wage workers would get a raise and bring $27 million in additional purchasing power.

"We have an opportunity to act in the next few weeks here in Minnesota to provide relief for our low wage workers," Coleman said. "We must ensure wages keep pace with the basic cost of food, housing and other necessities."

Statewide, 77 percent of people who would be impacted by the $9.50 minimum wage are age 20 and older.

The minimum wage debate was addressed at President Obama's State of the Union – he wants the federal minimum raised from $7.25 to $10.10 an hour, and used Minnesota-based Punch Pizza as an example after the owner raised his minimum wage to $10.

Read more: Punch Pizza a presidential paragon at State of the Union

Yet, some Republicans fear raising the minimum wage will compress wages for higher-paying jobs and they are also worried that employers could cut jobs to compensate for a higher base pay.

"Let's be realistic about this," Sen. David Dahms, of Redwood Falls, urged. "If you give Person A $9.50 and they go out and spend more, and person B and C lost their job -- at the end of the day, have you created more economic activity?"

A survey among members of the Minnesota Restaurants Association last year showed that if a minimum wage increase took effect, 77 percent said they'd reduce staff hours. Nearly 60 percent said they'd hold off on hiring new workers. The state's latest research shows the majority of people earning minimum wage do so in the food service industry.

Progressive groups dismiss those concerns, however, by pointing to a Harvard Review of Economics and Statistics study that compared states and found those with higher minimum wage saw strong earnings in low-wage sectors without negative employment.

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