Overview of Minimum Wage Ordinance
Effective 2018, the Minneapolis Mayor and City Council approved a Municipal Minimum Wage Ordinance, which requires large employers to pay Minneapolis workers $15 an hour by July 2022 and gives small employers two additional years to reach that target wage.
There will be a tiered phase-in period for small and large businesses.
Large businesses are defined as having more than 100 employees and
small businesses as 100 or fewer workers.
The minimum wage will be indexed to inflation after the target $15 an hour wage is reached. The ordinance does not include an exception for tipped workers in the hospitality industry - all workers will be subject to the minimum wage, regardless of tips, consistent with state policy.
The City's Department Civil Rights, Labor Standards Enforcement Division oversees enforcement of the municipal minimum wage. The ordinance also includes a private cause of action in district court for violations of the ordinance.
Minimum Wage Study RFP
The Coordinator’s Office is seeking proposals (until noon, central time, November 22, 2017) from qualified organizations to assess the economic impacts of the City’s minimum wage ordinance on workers, city residents, businesses, and the broader community. Suggested research questions are spelled out in an RFP. Successful responders to this RFP will offer a research plan that uses the latest available methods and takes advantage of assistance being offered from two state agencies.
The City also desires and expects that the Consultant’s work will be transparent and credible to all stakeholders. This will likely require additional communications with stakeholders at appropriate milestones. For more information, please consult the RFP here.
2016 Minimum Wage Study
In April 2015, the City Council adopted a resolution supporting a strong economy and working families. In September 2015, the City Council authorized the issuance of a Request for Proposals for a comprehensive economic analysis of the effects of an increased minimum wage, both locally and in Hennepin and Ramsey County. The contract for that economic analysis was awarded to a team of researchers from the University of Minnesota, Howard University, Rutgers University, and the Economic Policy Institute. That research team—led by the Roy Wilkins Center at the University of Minnesota—replicated techniques used in prevalent economic literature to simulate the relative impact of a minimum wage at $12 and $15 per hour.
The study found that of the City’s 311,000 workers, about 47,000 would be affected by an increase to $12 per hour and about 71,000 would be affected by an increase to $15 per hour. Moreover, the study concludes that workers of color—especially Latino and black workers—would disproportionately benefit from an increased minimum wage.
People of color would disproportionally benefit from a wage increase
The difference in estimations for the effect of a minimum wage is largely due to the fact that each model makes different assumptions on the best way to test for these effects.
Service industries like restaurants, retail, fast food, health care and child care are where minimum wage work is concentrated and where the benefits and impacts will be felt strongest by both employees and employers.