Well the democrats in my state are really planning to screw over the job front in my state. The have just recently passed a new minimum wage bill in the legislature and Gov. Dayton will probably sign it on Monday. Not only does it increase the minimum wage in our state, but they are doubling down on its impact by tying future increases to cost of living.
Right now the job situation in our state is fairly bleak as it is. We still have many of our college graduates having to settle for low paying jobs because of the scarcity of work available in our state. More and more industries are moving their locations to different states that don't have the tax burden that MN has; South Dakota -- a state that borders ours to the West -- has no income tax, and so while cities in that state like Soux Falls are seeing a boost to their economy, our state continues to lose business. So just from this standpoint, a minimum wage increase will make the state even more business-unfriendly leading to even more businesses fleeing the state for greener pastures.
But this bill is even worse than a mere minimum wage increase. By tying the minimum wage to the cost of living in future years, they will in effect just be exacerbating the problem by creating a vicious circle. When the government increases the minimum wage, not only does this just affect those making minimum wage, but continues to have ripples throughout all pay scales within a company. Assistant managers, lead cashiers, etc. that are currently making a little above minimum wage will now be paid the same as those inexperienced works that they are in charge of. So if the company wants to attract a higher quality of worker that those positions require, they will have to increase their wages as well.
With all of this increase in the expense that the companies will be forced to commit to (and all without any efficiencies to justify the added expense) they may be required to increase their prices. Since this minimum wage increase will affect all industry sectors, eventually the goods and services in this state will have to increase to meet the new minimum wage increase. But because the minimum wage will be tied to the cost of living, as goods and services increase, so does the cost of living which in turn increases the minimum wage which will increase the price of goods and services, which increase the cost of living, which increases the minimum wage, etc. The only way to break this vicious cycle is for the company to offset this added expense of operating in our state, meaning they will probably just pack up and move to a different state (esp. since we have business-friendly states neighboring our, meaning that moving costs will be relatively low making this option very attractive).
It's sad how the leaders in our state don't have basic economical sense to realize how this bill is going to hurt our state even more than the situation it's currently in.