Starting Saturday, Minnesota will have the highest minimum wage in the Midwest and one of the most generous in the country as it increases to $9 an hour.
An estimated 288,000 low-paid workers in Minnesota will benefit from the $1-an-hour raise, The Associated Press reports, which is the second of three annual increases that will see it rise again to $9.50 next August, and increase with inflation from then on.
It means Minnesota will be ahead of the minimum wages offered by South Dakota ($8.50), Illinois ($8.25) and Michigan ($8.15), which currently have the highest in the region, according to the National Conference of States Legislators (NCSL).
But not everyone has to follow it, small companies – with less than $500,000 in revenue – can still pay their workers the federal minimum of $7.25 per hour, Minnesota law says.
Upon announcing the hikes last year, Gov. Mark Dayton said: "Minnesotans who work full-time should be able to earn enough money to lift their families out of poverty, and through hard work and additional training, achieve the middle-class American Dream."
NCSL figures show the increase puts Minnesota among the states with the highest minimum wage.
The highest is currently the District of Columbia, where it is $10.50 an hour, with Washington state paying $9.47, Oregon at $9.25 and Vermont and Connecticut at $9.15.
Several states, including California, Massachusetts, Maryland and Hawaii are planning future increases that will take their minimums above $10 per hour.
Amid concern from some quarters about the impact the increase could have on employers, Gov. Dayton told the AP higher wages would benefit the wider economy.
"People aren't flying out to New York to spend this money. They're spending it in their local economy," he said "That's what drives our economy forward. It's not trickle-down economics. It's consumer spending."