After six years working at a Little Caesars franchise without a raise, Reginald Washington welcomes the Minneapolis minimum wage increase that takes effect July 1.

"I wish I could make more, but Little Caesars won't just give you a raise," Washington said. "The raise is the minimum wage."

The minimum wage in Minneapolis will increase to $12.25 an hour for businesses that employ 100 or more workers and $11 an hour for smaller businesses. The increase is the third step in the city's minimum wage ordinance, which has been in effect since January 2018. Workers in Minneapolis will make the full $15 an hour by 2022 for large businesses and 2024 for small businesses.

For Washington, the increase means he will make an additional 75 cents an hour. With the money he makes every pay period, he helps support his daughter and grandson. The raise in the minimum wage is helpful, he said, but not enough.

Little Caesars did not respond to phone messages and emails seeking comment.

At the Hub Bicycle Cooperative there are 60 employees working during the summer, but that number drops to about 30 during the winter. It qualifies to pay its workers the small business minimum wage, but will instead pay its workers the one for large businesses, said Amber Schmidt, one of the workers and owners at the shop.

Amber Schmidt works on a bicycle at the Hub Bicycle Cooperative. Christine T. Nguyen | MPR News

"Financially it's challenging because it's a big jump to pay everyone and to bring everyone up at the same time," Schmidt said. "So we're trying to increase the wage more quickly because we think it's important, but that gave us a guideline of where we needed to be."

The city has resources and training programs in place to help business owners make the minimum wage increase more manageable, according to Brian Walsh, a labor standards enforcement supervisor in the Minneapolis Department of Civil Rights. Walsh says the wage increase should get more workers closer to a livable wage.

"The basic theory is that if we all pay 5 cents more for a cup of coffee then the barista can earn, not necessarily a living wage, but we can raise the standards of our lowest wage earners and both invest in the productivity currently of our labor force but also the future productivity of our labor force," Walsh said.

That's exactly what the Hub hopes will happen, Schmidt said. Customers will see an increase in the price of products and services over time, which will help pay its employees more.

"We, as a business, would like to have our employees be paid a wage that they can live on," Schmidt said. "Having Minneapolis create that policy is great. It's something that we support and that we're on board with and are working towards."

While many employers support the minimum wage increase, others are opposed to raising it more.

The National Federation of Independent Businesses has argued the minimum wage increase will hurt many small businesses in Minneapolis.

A higher minimum isn't necessary, argues Mike Hickey, the NFIB's Minnesota director. He said the minimum wage is intended to be a starting wage, not a livable wage, and that most workers move up the pay scale pretty quickly.

"They make the argument that people can't afford a mortgage on minimum wage, and they can't, that's correct, and you're not supposed to be able to afford a mortgage on a minimum wage," Hickey said. "It is a starting wage and the higher we raise the minimum wage the less opportunity there is going to be for people at the bottom of the employment ladder."

Veronica Mendez Moore, co-director of Centro de Trabajadores Unidos en la Lucha, leads a training session Saturday in Minneapolis. Christine T. Nguyen | MPR News

But the minimum wage will make a big difference in the lives of many, particularly people of color, said Veronica Mendez Moore, co-director of Centro de Trabajadores Unidos en la Lucha, a Minneapolis-based group that advocates for workers' rights. According to the city's Department of Civil Rights, as many as 78,000 people will see an increase in pay.

"It's important in that it makes a meaningful impact in people's lives to have a higher wage," Mendez Moore said. "But it's also important that it's about dignity, it's about respect, it's about being heard and that's something that matters deeply to people and impacts people's lives as well."

For Reginald Washington, the increase in pay could be life changing. Earning just above the minimum wage he couldn't afford to keep living on his own and moved into a shared living facility in St. Paul. He shares a kitchen and bathroom with 14 other rooms on his floor. He worries about keeping his grandson safe in the facility.

Once the minimum wage goes up to $15 an hour, Washington hopes to get his own place again.

"I just want to be happy." Washington said.