Minnesota’s minimum wage rates will increase in 2020.
The state’s rates were set to be adjusted for inflation on Jan. 1, 2020 to $10 an hour for large employers and $8.15 an hour for other state minimum wages. In 2019, the change in the price index used for this purpose was an increase of 1.41 percent.
Minnesota employers with gross revenue of $500,000 or more are considered large state employers and are required to pay workers a minimum of at least $10 an hour. Small employers are considered small if they have less than $500,000 for gross revenue. These employers are required to pay their workers at least $8.15 an hour.
Minnesota will not be the only state to see a change to its minimum wage law. Twenty-one states and 26 cities and counties will increase minimum wage rates starting in the new year. In 17 of those, the minimum wage will reach or exceed $15 an hour, according to reports released by the National Employment Law Project (NELP).
“We’re seeing an unprecedented number of states, cities and counties raise the minimum wage,” said Yannet Lathrop, researcher and policy analyst with NELP. “Local communities all around the country strongly support raising the minimum wage, because people see their friends, neighbors, or themselves working hard but not getting ahead. People who work low-wage jobs need and deserve a raise — and companies can afford it. There’s no excuse.”
Later in 2020, four states and 23 cities and counties will also increase their minimum wages. According to NELP, a total of 24 states and 48 cities and counties — a record-high 72 jurisdictions — will raise their minimum wage sometime in 2020.
Analysts say this good news brings relief for millions of individuals and families in the U.S. struggling to survive on low paying jobs.
“These increases will put much-needed money into the hands of the lowest-paid workers, many of whom struggle with high and ever-increasing costs of living,” Lathrop said.
According to Investopedia, raising the minimum wage would help stimulate the economy due to the increased spending power of workers receiving higher wages. Raising the minimum wage to an excessively high rate would exert inflationary pressure on the economy. However, increasing it to keep pace with inflation would have a minimal effect.
The current federal minimum wage remains at $7.25 an hour and has not been changed since 2009. Furthermore, there are no public plans for a federal increase.
This “federal inaction,” Lathrop said, is a significant reason why so many states, cities and municipalities are raising minimum wages.
For more information, visit https://www.dli.mn.gov/.