Our View: Will Minnesota minimun wage impact St. Croix County?
Minnesota Gov. Mark Dayton (D) signed a new minimum wage law raising wages to at least $9.50 an hour by 2016 and the next question is what sort of impact the change may have on border counties like St. Croix County.
With Wisconsin’s minimum at $7.25 –- unless it changes in the future -- there could be an issue with people choosing to move or work in Minnesota for higher wages.
For the current workforce in the Gopher state, it has been predicted that a $9.50 an hour minimum wage would mean a raise for 357,000 Minnesotans. Of course, we don’t know the impact the higher wages will have on Minnesota business.
Will everyone make more money and business owners reap more benefits so that everyone is happy? Will employment levels stay the same, drop, or rise?
Our concern, of course, is how it will impact Wisconsin –- especially border counties. An AFLCIO economist said a few years ago that “the variety of state minimums encourages companies to shift jobs to the lower-wage states.”
Could that mean that more Minnesota companies will move plants to a state like Wisconsin to find employees who would work under a lower pay scale?
For border counties like St. Croix, would people be willing to drive to Minnesota if they are making more than $2-per-hour less in the Badger state? We suspect many people would. What will be the ultimate impact on businesses in Wisconsin?
We understand that there are people who may not choose to drive in order to make more money. Many minimum wage earners are part-time senior citizen and teen workers who may not see the value in driving to the “cities.”
There are also some economists who have expressed concern over people who may move out of the state for higher pay. Some are predicting that Wisconsin will have to follow suit in the near future by raising the minimum wage. But, again, would that mean fewer jobs and/or higher prices.
If the Minnesota minimum wage model catches on, states could fall like dominos as each state is forced to fall in line with higher minimum wages, or risk losing a part of the employment pool.
Of course, everyone –- regardless of where one lives -- would like to see the highest possible wages. Everyone wants to see increased wealth. The higher minimum wages, however, brings about other potential consequences. Can a company stay competitive and sustainable –- especially in the global market?
These are all questions with no concrete answers at the moment. Most concerns will not likely be addressed until border counties in Wisconsin see the impact of the Minnesota changes.
Hopefully, if the differential continues to exist, it will not have a big impact on St. Croix County. Remember, most skilled positions pay above the minimum wage.
But the next couple of years could paint an interesting picture as we examine how a law change in Minnesota impacts Wisconsin.