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Minneapolis minimum wage increasing to $14.50 for small businesses

Next year, the minimum wage will increase to $15 for small businesses and match the minimum wage for large businesses.
Image by Photo by Gabrielle Erenstein
The raise was part of a five-year plan approved by voters in 2017.

Minneapolis’ small business minimum wage will increase by one dollar beginning July 1.

The city’s minimum wage is increasing to $14.50 per hour for Minneapolis businesses with fewer than 100 employees beginning July 1, the sixth increase in six years. The increase is part of a 5-year plan following a 2017 city ordinance to increase the minimum wage to $15 for small and large businesses.

Beginning in July 2024, small and large businesses will have the same minimum wage of $15.19 per hour. The minimum wage will increase every January to account for inflation. The University of Minnesota, unlike the city and state, the $15 per hour student minimum wage will not have to adjust for inflation.

Kent Kramp, Dinkytown Raising Cane’s owner and president of the Dinkytown Business Alliance, said paying minimum wage is not attracting workers post-COVID.

“You can’t find anyone to work for minimum wage,” Kramp said. “We haven’t been paying minimum wage in our Cane’s in a long time.”

Kramp said his employee’s average wage is above $17 an hour.

Minneapolis Employment and Training Director Deb Bahr-Helgen said job openings are a widespread issue for businesses.

“We are also seeing an increasing gap between labor demand and supply,” Bahr-Helgen said. “We are working more closely than ever with local employers to fill job openings.”

While the city’s minimum wage has increased, it has not increased the number of jobs like many officials have hoped, according to a 2021 report from the Federal Reserve Bank of Minneapolis. 

Minneapolis’ minimum wage increase will be double the national minimum wage of $7.25 per hour and still higher than the Minnesota’s minimum of $8.63 for small businesses.

Minimum wages in 2024 and beyond will be adjusted by inflation. (Graphic by Jack O’Connor)

After the fifth year of a minimum wage increase, most Dinkytown businesses are not concerned about the rising minimum wage, according to Kramp. With many businesses already paying above minimum wage, the increased wage will not impact them.

“The conversation is not even happening,” Kramp said.

Dinkytown Qdoba Owner Randal Gast said he pays above minimum wage to attract employees, but increasing employee pay will increase menu price costing customers

“We have been paying [the new minimum wage], or more, to hire people. The competition for labor is so high,” Gast said. “Every pay increase for employees results in increased food prices. Everyone just passes down costs to the consumer.”

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