Economic Impact

​Minneapolis Min Wage in a nutshell

​The Municipal Minimum Wage Ordinance phases-in its raises – on two tiers – for small (100 or fewer employees) and large businesses (more than 100 employees). 

A $15 per hour rate was out of reach for as many as 78,000—or 1 in 4—workers in Minneapolis. But by 2024, those workers stand to see a pay bump—or several—assuming nothing else changes.

Federal Reserve Bank of Minneapolis to monitor economic impact

​The Federal Reserve Bank of Minneapolis is committed to conducting seven annual reports, which will examine effects on workers and firms. This multi-year minimum wage impact study promises to include data never before accessed. The planned schedule for public release of these reports is:

1. Baseline Report covering 2014 - 2017 (see below)
2. Years 1-3 Report covering 2018-2019 wage increases and preliminary data on 2020 wage increase (released November 1, 2021)
3. Year 4 report covering 2020-2021 wage increases (due October 1, 2022)
4. Years 5-10 reports covering 2022 and beyond (due every October 1 through 2028) 

The initial Baseline Report and Baseline Report slide presentation were released on September 13, 2018, describing baseline trends in Minneapolis from 2000 to 2017. 

Important findings in the Baseline Report included:

• While real wages (wages adjusted for inflation) have increased steadily in Minneapolis overall since the 2000's, real wages decreased ("negative growth" including some recovery post 2011) for workers self-identifying as Black 
• Overall employment had reached levels higher than in the early 2000's
• Overall number of establishments and worker turnover rates had both been declining
• The health care and education industries stand out due to their large overall sizes and proportion of workers affected. 
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A second report was released November 2021, covering 2018-2019 and preliminary data from 2020.
A summary is available in news coverage and more in-depth analysis provided by the Federal Reserve Bank.
 
Effects observed from 2018-2019 data, by sector, included:

• In Retail Trade, average hourly wages across the sector increased by about 6%. Any effects on total jobs, total hours worked, and workers’ total earnings cannot be statistically distinguished from zero.
• In Administration and Support, average hourly wages across the sector increased by about 7%. Any effects on total jobs, total hours worked, and workers’ total earnings cannot be statistically distinguished from zero.
• In the Other Services sector, average hourly wages across the sector increased by about 6%. Workers’ total earnings increased by about 8%. Any effects on total jobs and total hours worked cannot be statistically distinguished from zero.
• In Health Care and Social Assistance, any effects on average hourly wages, total jobs, total hours worked, and workers’ total earnings (i.e., all the outcomes studied) cannot be statistically distinguished from zero.
• In the Accommodation and Food Services sector overall, any effects on average hourly wages, total jobs, total hours worked, and workers’ total earnings (i.e., all the outcomes studied) cannot be statistically distinguished from zero.

Preliminary results that include data from 2020 in the analysis show similar effects in all sectors with the exception of statistically significant decreases to jobs, total hours worked, and workers’ total earnings in Accommodation and Food Services overall. 

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