At the close of June, the Minneapolis City Council approved an ordinance that would raise the minimum wage to $15/hour through a phased approach that will go into full effect by July 1, 2024, not including potential adjustments for inflation.
Starting on January 1, 2018, large businesses with 100 or more employees will see a minimum wage increase to $10/hour; small businesses have no increase. The minimum wage will grow gradually over the seven years with large businesses reaching the $15/hour mark by July 1, 2022, while small businesses reach that level two years later.
Minneapolis was not the only city to see an wage increase law this summer. Chicago, San Francisco, Los Angeles, Flagstaff, and Washington, D.C., are among the cities raising wages. Workers in Maryland and Oregon also saw their wages increase. Overall, as of June 2017, nine large cities and eight states had enacted minimum wage policies in the $12 to $15 range.
Business interests are not fans of the wage increases, contending that different minimum wage requirements make it challenging for businesses with operations in multiple states. In the vote by the Minneapolis City Council, the lone council member voting against the proposal was concerned that it would make small businesses less competitive.
Two studies released in June provide mixed messages on the impacts of wage increases on local economies.
A study by the University of California at Berkeley on the impact of wage increases in Seattle on the city’s food service industry found that employment in food service was not affected by the wage hike. The study analyzed county and city-level data for 2009 to 2016 on all employees counted in the Quarterly Census of Employment and Wages.
A minimum wage study conducted by the University of Washington on the Seattle minimum wage increase using data from the State of Washington Employment Security Department came to a different conclusion. The study found that increases in the minimum wage to $13/hour in 2016 resulted in total payroll for low-wage jobs declining rather than increasing.
However, this debate seems to be of less concern to the people who are benefiting from increases in the minimum wage. The Minneapolis Star Tribune noted the excitement of the local workers who came to city hall to attend the City Council vote to increase the city’s minimum wage. “I’m just really excited,” said Catherine Olsen, a barista, according to the Minneapolis Star Tribune. “I’m proud to be in Minneapolis right now.”