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Minimum wage hike debate hits Austin

Published 11:01am Monday, April 15, 2013

Local residents may get a boost in their paycheck if state and federal legislators decide to increase the minimum wage.

The Minnesota Legislature is considering several bills to increase the state’s minimum wage from $6.15 to more than $7.25 an hour. Those proposals include increases up to $10 per hour and more over the next few years.

Congress has also debated similar measures ever since President Barack Obama urged Congress to raise the federal minimum wage in February. He reaffirmed his position when he included a measure raising the minimum wage from $7.25 to $9 per hour in his budget proposal released last week.

Proponents of a minimum wage increase say it would lead to more job creation and help people who haven’t had a cost of living increase in years, while critics worry a minimum wage increase will lead to heavy expenses on businesses, forcing them to reduce hours for staff or lay them off.

State Sen. Dan Sparks, DFL-Austin, said the debate at the Capitol is far from over, as legislators determine how best to tackle minimum wage without hurting Minnesota businesses.

“We need to make a distinction between a minimum wage and a liveable wage,” he said.

Yet locals are waiting to see what comes of that debate.

“I can see both sides as to why the minimum wage could increase,” said Maria Medina, an Austin High School senior. Medina is waiting until summer to work a part-time job, as she’ll join many teenagers who make up a majority of minimum-wage workers in the U.S.

A minimum wage increase could greatly affect the Austin economy, as almost 19 percent of Austinites are living at or below the poverty line, according to the U.S. Census Bureau, while Austin’s unemployment rate has hovered at around 5 percent over the past few months, ending at 5.1 percent in February.

“We have a lot of lower paying jobs in town,” said Mayor Tom Stiehm.

The city of Austin sets aside $425,000 each year to pay part-time employees, a majority of whom are hired for the summer. The city budget won’t be affected this year, but city officials will likely have to examine each department’s 2014 budget should a minimum wage increase pass into law.

“If the costs are X, it’s going to have to come from elsewhere,” Finance Director Tom Dankert said. Dankert said city officials could solve the issue through several measures, including cutting part-time employee positions or increasing fees for summer activities like the municipal pool.

There’s no guarantee a minimum wage increase would take place, though Minnesota hasn’t passed a wage hike since 2005. Several states are also considering minimum wage increases, with New York legislators tentatively working out a minimum wage increase to more than $9 an hour over the next two years.

At the federal level, legislators have grappled over the issue for the past two months, recently defeating a minimum wage increase of up to $10.10 an hour last month. It remains to be seen whether Democrats in the House of Representatives and the Senate take up Obama’s minimum wage proposals once more this session.

— The Associated Press contributed to this report.

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