Economic Impact

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​Minneapolis Min Wage in a nutshell

​The Municipal Minimum Wage Ordinance phases-in raises – on two tiers – for small and large businesses. Large businesses are defined as more than 100 employees and small as 100 or fewer.

The minimum wage will be indexed to inflation after a target $15 an hour wage is reached. Employers must pay a minimum wage without including tips or gratuities.

Federal Reserve Bank of Minneapolis to monitor economic impact

​The City has contracted with the Federal Reserve Bank of Minneapolis to produce 4 annual reports examining effects on workers and firms. This multi-year minimum wage impact study promises to include data never before accessed:

1. Baseline Report covering 2014 - 2017 
2. Year 1 Report covering 2018 wage increases (due October 1, 2019)
3. Year 2 report covering 2019 wage increase (due October 1, 2020)
4. Year 3 report covering 2020 wage increase (due October 1, 2021)

The initial Baseline Report was released on September 13, 2018.  It describes key economic trends in Minneapolis during the 2000-2017 period. It highlights groups and sectors most likely to be impacted by minimum wage increases.  Future reports will measure these actual economic impacts.

Meet economic researchers and follow additional coverage on the Federal Reserve Bank of Minneapolis website.

Download the Fed's Minneapolis Minimum Wage Increase Baseline Report and all related data:

• Baseline Report 
• Baseline Report slide presentation

A $15 per hour rate is a high-water mark that is currently out of reach for as many as 78,000—or 1 in 4—workers in Minneapolis. But by 2024, as the minimum wage crests at $15 per hour for all firms, those workers stand to see a pay bump—or several—assuming nothing else changes.

​The researchers’ baseline analysis of the Minneapolis labor market shows the groups most affected (by an increase in the minimum wage) are:

• Those with less than a high school education
• Those younger than 25 years old
• The administrative services industry (i.e. subcontracted day-to-day support of another organization, such as temporary employees, office assistance, cleaning, facilities and grounds maintenance, and security) 
• The restaurant and other food services industries; and
• Retail sales, cashiers

In addition, the health care and education industries stand out due to their large overall sizes and proportion of workers affected. Finally, the demographic group of workers who identify as nonwhite is very disproportionately affected.

​Other highlights of the Baseline Report include:

• While real wages (wages adjusted for inflation) have increased steadily in Minneapolis overall since the 2000's, real wages have decreased ("negative growth" including some recovery post 2011) for workers self-identifying as Black 
• Overall employment has now reached levels higher than in the early 2000's
• Overall number of establishments and worker turnover rates have both been declining
• Consumers in the metro area have shifted consumption away from apparel, tobacco, and alcohol, and toward health and education