Minimum-wage increase in Minnesota has potential to boost economy
MANKATO, Minn. (KEYC) - Effective as of Jan. 1, 2020, minimum-wage in Minnesota was adjusted for inflation leading to an increase of more than one percent.
Minimum-wage rates in Minnesota are now $10 an hour for large employers and $8.15 an hour for small-employers, affecting a portion of the population in the Mankato area.
“Our, sort of, estimate of the figures of our local population here in terms of what the data tells us on income levels is that about 8,000 or so folks are employed in our hospitality industry, which is usually where we see folks at that minimum wage level,” said vice president and director of government and institutional affairs for Greater Mankato Growth, Patrick Baker.
A labor market analyst with the Minnesota Department of Employment and Economic Development said it could boost the economy in more ways than one
“Raising the minimum wage could increase spending by those people... raising that minimum wage could increase productivity as well as reduce turnover, so people will hopefully stay with their business longer if they’re earning more,” said Mark Schultz, regional labor market analyst for the Minnesota Department of Employment and Economic Development.
The minimum-wage increase could help create a balance in the Mankato area.
“Right now in the South Central region, in which Mankato is in, it’s at 0.5 to one, so what that means is for every ten job openings, there are only five unemployed people,” said Schultz.
Local business advocates are staying aware of the effect the increase can have on all components of the marketplace.
“As that minimum wage goes up, that means that that particular business has less dollars to invest in potential capital acquisition or growth in their business, and it’s something that we watch pretty closely in terms of a policy perspective to make sure the state isn’t doing anything that will adversely impact our businesses,” said Baker.
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