Raising the minimum wage to $15 an hour in Minneapolis could mean big increases in earnings for low-wage workers of color, according to a new city-commissioned study.
Researchers presented their study's results to Minneapolis City Council members on Wednesday, and they found that 71,000 workers would be impacted by the $15 wage, while 47,000 workers would be affected by the $12 minimum. The bulk of those workers, researchers said, work in service industry businesses like restaurants and retailers.
Researchers at the Roy Wilkins Center for Human Relations and Social Justice at the University of Minnesota conducted the study. The city contracted with the center in February to explore the impacts of raising the minimum wage to $12 and to $15 an hour by the year 2021 in Minneapolis, as well as in Hennepin and Ramsey counties.
Thomas Durfee, a researcher at the center, said service industry businesses, like restaurants could expect to see increased costs of more than 5 percent.
The study ran simulations on how restaurants might absorb those costs by raising prices, he said.
"It would lead to an increase in menu prices of only a $1.11. For a $15 an hour minimum wage, the cost increase for that same meal would be $1.66," said Durfee. "This is accounting for inflation."
Council member Lisa Goodman was skeptical that the labor cost increases would be easy for businesses to absorb.
"I have a lot of restaurants in my ward," said Goodman. "And a 5 percent increase in their expenses could be the difference between making it and not making it."
The report is being welcomed by activists who failed to get a measure on the ballot to change the city charter to mandate a city-wide $15 an hour minimum wage.
"This report shows that passing a $15 minimum wage by 2021 will be a tremendous step to reducing poverty in Minneapolis and would especially provide economic opportunity for women and workers of color," said Ginger Jentzen, executive director of 15 Now Minnesota, one of several organizations which pushed for the charter amendment.
City officials also outlined plans to hold community meetings about a possible minimum wage increase starting next month. The council is expected to receive a set of recommendations next spring.