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House OK's higher minimum wage

ST. PAUL - A minimum wage increase lawmakers support needs to change before Gov. Tim Pawlenty can support it, he said Thursday moments after the House approved the wage hike.

The bill would raise the minimum wage in large businesses from $6.15 to $6.90 an hour on July 24 and $7.90 next year. Minimum wages in small businesses would go up from the current $5.25 to $5.75 this summer and $6.75 in 2009.

A worker younger than 20 years old could be paid less during the first three months on a job.

The House passed the measure on an 82-45 vote. Senators passed a very similar version 80-23 last month.

Bill sponsor Rep. Tom Rukavina, DFL-Virginia, said Minnesota has fallen behind other states in minimum wage laws.

"Minnesota has always prided itself on being first with the minimum wage," Rukavina said.

The state is 32nd in the country for big employers and 46th for small ones, he said. If his bill becomes law, he added, the minimum wage would rise to No. 7 nationally for large businesses, but would rise only slightly for small firms.

Pawlenty said he has backed minimum wage increases in the past, but does not support Rukavina's measure.

"The House bill that just passed today is overbaked, it overreaches," Pawlenty told reporters.

Specifically, the governor called the inflationary provision "concerning," referring to a requirement that automatically would raise the minimum wage.

The House vote was largely along party lines, with Republicans generally opposing the increase.

Most debate centered on whether restaurants owners could take tips into account. Without that provision, which was not in the bill, waiters and waitresses could make far more money than people like dishwashers, who do not receive tips, Rep. Denny McNamara, R-Hastings, said.

"I'm sick of having our small business in Minnesota closing their doors" because of laws like Rukavina proposed, McNamara said.

He told of a waitress who ended up making more than $22 an hour, including tips, while dishwashers and others may only earn $8.

Communities near states like Wisconsin and North Dakota are at a disadvantage, Rep. Morrie Lanning, R-Moorhead, said.

Existing law, which does not take tips into account on minimum wage decisions, means a Moorhead restaurant would pay $2.25 an hour more for a waitress than a Fargo restaurant, Lanning said. That, combined with other North Dakota tax advantages, hurts Moorhead firms, he added.

"By driving businesses out of the state, we are increasing the property tax burden in border communities," Lanning said.

State Capitol reporter Scott Wente contributed to this story.

Don Davis
Don Davis has been the Forum Communications Minnesota Capitol Bureau chief since 2001, covering state government and politics for two dozen newspapers in the state. Don also blogs at Capital Chatter on Areavoices.