Minimum Wage Debate Ramps Up Before 2014 Session
MINNEAPOLIS (WCCO) – President Barack Obama shed a national spotlight on Minnesota Tuesday night when he praised a Minneapolis business owner during his State of the Union speech.
John Sorrano, a founder and co-owner of Punch Pizza, was noted for his decision to raise the minimum wage of his employees to $10, well above the state's minimum.
Sorrano and kitchen worker Nick Chute attended the State of the Union address as guests of First Lady Michelle Obama.
The president called for more business leaders to follow Sorrano's lead. On Wednesday, a panel of economic experts and a state legislator weighed in on the minimum wage debate.
Now is a critical time for weighing the pros and cons of raising Minnesota's minimum wage. The state Legislature will be taking up the issue when it convenes for the 2014 session in February.
Right now, Minnesota's minimum wage is below the federal minimum of $7.25 an hour. It's currently $6.15 an hour for large employers and $5.25 an hour for small business owners.
Rep. Ryan Winkler (D-Golden Valley) is the lead author of a bill in the Minnesota House to raise the minimum wage to $9.50.
"I think if you can't get ahead through hard work, we have lost something very important in our economy," he said. "When people can't support a family by working full-time, we have lost something that is crucial to our identity and crucial to our values."
The Minnesota Chamber of Commerce opposes Winkler's bill because of concern that businesses will suffer. Ben Gerber represented the chamber in Wednesday's debate.
"Money doesn't grow on trees," he said. "There's only a certain amount of actual labor costs that businesses can incur. When you artificially bump up wages, it has to come from somewhere. What the evidence shows is that comes from other people in the middle class."
The co-owners of Punch Pizza shared their thoughts Wednesday as well, saying they spent a couple of years studying the idea of paying their workers more.
"We were confident with the way our company was growing and the way it was structured...that we would be able to do this," Sorrano said.
King Banaian, an economics professor at St. Cloud State, says raising the minimum wage doesn't actually improve poverty rates.
"I would point out that there is pretty good evidence that the minimum wage is a poor tool for addressing poverty, and if you want to do that, there are better tools available," he said.
The Minnesota Chamber of Commerce does support raising the state's minimum wage to be in line with the federal minimum of $7.25, but no more than that.
Obama is seeking to raise the federal minimum from $7.25 to $10.10 an hour.
Last session, it looked like the minimum wage increase was going to pass, but it didn't.
It was debated quite a bit, and was passed by the House, but never got a vote in the Senate.
However, it is expected to be top priority this session.