Both the U.S. Senate and House of Representatives passed a minimum wage increase Friday that will raise the wage by 90 cents over the next year, from $4.25 to $5.15 an hour. President Clinton is expected to sign the legislation into law this week.
However, the increase does not necessarily mean an increase in wages for University students. Most University students already make more than the minimum wage and will not automatically get a raise.
Dana London, senior director of the Student Employment Center, said students with on-campus jobs will not get a raise because of the minimum wage increase.
“This won’t have a huge impact on students (who work) on campus,” London said.
London said students working on-campus jobs received a 3.5 percent pay increase July 1, an increase that brought starting wages from $6.35 to approximately $6.50 an hour. She said the wage is set by the University and will not increase again this year.
“This program is not set by the minimum wage,” London said. “It is set by the University.”
London said the University pay scale can be renegotiated for an increase next July.
The Student Employment Center also posts job listings for off-campus jobs. London said average pay for these jobs is $7 per hour, and only about 10 percent of the jobs pay the minimum wage.
Some University area business owners that employ University students said their pay wage will not change. The manager of Bruegger’s Bagels on Washington Avenue said the Bruegger’s chain already pays above minimum wage, and it will not increase employees’ starting wage.
Both Goldy’s Bar and Stub and Herb’s in Stadium Village pay their servers the $4.25 minimum wage, so they will see the increase. However, Jenny Larson, a College of Liberal Arts senior who works at Goldy’s, said the increase won’t make a dramatic change in her paycheck because waitresses there “make more in tips in one night than what they get on their whole paycheck.”
Applied economics professor Tom Stinson said the minimum wage increase will not have a large impact on the University or on the state.
“The low unemployment indicates that the minimum wage is a floor rate,” Stinson said. “The market has set the wage.”
Stinson said most businesses will not raise wages.
“Looking at the help-wanted signs in local stores, I doubt this will have much impact on University student incomes,” Stinson said.
Politics was a reason for the raise increase, Stinson said. “This is a political decision, not an economic decision,” Stinson said. “This is a political year.” All 10 Minnesota legislators voted for the increase. The legislation passed overwhelmingly in both houses. The House of Representatives passed the increase 354-72 while the Senate passed it 76-22.
The legislation moved slowly through both houses, as Republicans tried to pass an amendment that would make small businesses exempt from the pay increase. When that amendment failed July 9, it cleared the way for the legislation to pass.
The minimum wage will increase nationwide from $4.25 to 4.75 an hour when the bill is signed into law this week, and the wage will increase again to $5.15 one year later.