Policy Overview and Independent Research
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.
Research Study Ongoing
In collaboration with the City of Minneapolis, the Federal Reserve Bank of Minneapolis is currently conducting a comprehensive study and analysis of the economic effects of the Minneapolis Minimum Wage Ordinance. It's first report is due fall 2018 with subsequent reports coming in October of each year for the next 3 years.
2016 Study Results
In April 2015, the City Council adopted a resolution supporting a strong economy and working families. In 2016, a team of researchers from the University of Minnesota, Howard University, Rutgers University, and the Economic Policy Institute 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.