New laws raise minimum wage

By Jordan Gerard

The Caledonia Argus

 

For the first time in ten years, the minimum wage law will be increased.

A series of laws enacted by the Minnesota legislature included raising the minimum wage to $9.50 by 2016.

The increase will be gradual with the first part of the increase taking effect in August. The new hourly wage will be $8 per hour, which is a $1.85 increase from the original rate of $6.15.

After the initial increase, the minimum wage law will go up every August until it reaches $9.50 in August 2016. The minimum wage rates will differ slightly depending on how much the business makes annually.

Businesses that make at least $500,000 in gross annual sales will have to pay their employees $8 starting this August and raise it to $9 in August 2015 and finally up to $9.50 in August 2016.

For businesses that make under $500,000, the minimum wage will increase to $6.50 per hour starting this August and raise it to $7.25 in August 2015 and finally $7.75 in August 2016.

The increase doesn’t stop there. Starting in 2018, all wages will increase each year on January 1 at the mercy of inflation measured by the implicit price deflator, capped at 2.5 percent.

The yearly increase can also be suspended for one year if “leading economic indicators” predict a decline in the economy. The suspension would go into effect after a public hearing and comment session and it could be added again when the economy improves.

The minimum wage law will be in effect for the entire state of Minnesota, but how will it affect business in Caledonia?

Good Times Restaurant and Bar owner, Kris Wedl, said the raise will make it harder if she has to raise prices but her employees will be “incredibly happy to see the change.”

“It’s hard to get people for jobs in general, but the raise might make people more willing,” Wedl said. “I’m very curious to see how the job market will do with the new raise.”

The city council has already decided to increase the minimum wage at city-run businesses like the liquor store. This was decided at the June 9 meeting to ensure that new employees would not be earning more than employees who had been employed for a longer time and to plan ahead for the wage increase.

 

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