Legislative negotiators have agreed to raise Minnesota’s minimum wage to $9.50 per hour, but remain at an impasse over the subject of indexing the wage in future years so that it keeps pace with the cost of living. Yesterday’s Minnesota 2020 article contended that the principle arguments in opposition to indexing were baseless. To further bolster the case for indexing, new projections indicate that growth in an indexed minimum wage will be modest. Continue Reading
One of the outstanding issues in current legislative negotiations over the minimum wage involves “indexing,” which refers to the practice of annually adjusting the minimum wage so that it keeps pace with inflation. Without annual inflation indexing, the value of a $9.50 per hour minimum wage will erode over time as the purchasing power of the dollar declines. Continue Reading
In his State of Union address, President Obama noted that one of the most serious problems confronting the nation is growing income inequality. Perhaps the most troubling manifestation of this problem is the real decline in income among middle- and lower-income families. The national problem of declining income is also a Minnesota problem—affecting all regions of the state and commencing well before the start of the Great Recession.
The year just ended was a momentous one. A decade of declining public revenue was reversed , with renewed investment in education, infrastructure, worker training, and healthcare. Furthermore, the dollars needed to fund these public assets were generated in a way that will reduce the regressivity of Minnesota’s tax system. However, despite the far-reaching changes made on the tax and spending front in 2013, some heavy lifting remains before us in 2014.
Raising Minnesota’s minimum wage to $9.50 by 2015 would boost wages for an estimated 357,000 workers, helping increase purchasing power in the state by an estimated $470 million. Minnesota 2020 took these figures a step further to show what impact a $9.50 minimum wage would have in certain parts of the state. Continue Reading
Poor Americans are having a hard time reaching the middle-class and the middle-class is having a harder time staying middle class, according to a new report from Dēmos, a progressive public policy organization that focuses on issues pertaining to economic and political inequality. According to the report, “Today it is not only poor families but many middle class families who are furiously running in place. Millions are working hard to move forward, or just to make ends meet, and getting nowhere.”
After a decade of cuts in real (i.e., inflation adjusted) per pupil state support for K-12 education, the FY 2014-15 budget passed during the 2013 legislation session provided a significant increase in state aid. The increase in state funding projected to occur from FY 2013 to FY 2015 under the recently approved budget is sufficient to replace about one-third of the real per pupil school district aid loss that occurred over the previous decade.
Before the governor and legislature could bring property tax relief to Minnesotans, all of the major players—many with competing interests—had to compromise on how to do it fairly, agreeing to reforms that would make the city Local Government Aid (LGA) formula less volatile, less complicated, and better targeted to cities in greatest need of state assistance.
Among the accomplishments of the 2013 legislature is a reformed city Local Government Aid (LGA) formula that distributes property tax relief to communities across the state. The new formula more effectively targets aid to cities with the greatest need for state assistance and represents the most significant reform to the LGA program in twenty years. These reforms were accompanied by a significant increase in LGA funding.
Two recent reports—the first from the Minnesota Budget Project and the second from Growth & Justice—underscore different aspects of the same distressing economic trend: lower- and middle-income households’ deteriorating earning and purchasing power.