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Minnesota Legislature

House panel OKs study that would examine impacts of $15 per hour minimum wage

Gene Ranieri, government relations director for the city of Minneapolis, testifies May 13 before the House Judiciary Finance and Civil Law Division on HF2821. Photo by Paul Battaglia

How will boosting the minimum wage to $15 per hour, as St. Paul and Minneapolis have done, affect residents of those cities? Will jobs be lost or gained? Will it hurt or help small businesses? Will the effects be different for tipped employees compared to workers who don’t rely on tips?

To answer those and other questions, HF2821 would authorize the Federal Reserve Bank of Minneapolis to use taxpayer data from the Department of Revenue to conduct and publish “economic research studies regarding the impact of implementation of minimum wage ordinances adopted by Minneapolis, Saint Paul, and other Minnesota cities that adopt similar ordinances.”

The bill, as amended, was approved by the House Judiciary Finance and Civil Law Division Monday and sent to the House Floor. There is no Senate companion.

Sponsored by Rep. John Lesch (DFL-St. Paul), the bill would permit the use of taxpayer data to conduct the study, but any published studies “must not include the identity of a taxpayer” and the bank must keep taxpayer data secure from unauthorized access, among other data protection provisions.

Lesch said the bill’s impetus was an offer from the Federal Reserve Bank of Minneapolis, soon after St. Paul and Minneapolis passed their minimum wage ordinances, to conduct multi-year studies – free of charge – for each city.

Brenda Kyle, president and CEO of the St. Paul Area Chamber of Commerce, noted that she was co-chair of a 2018 study by the Citizens League to examine the impact of St. Paul’s minimum wage ordinance. She said that although that study was thorough, it was limited by the lack of taxpayer data that could be used by the Federal Reserve Bank.

St. Paul Treasurer Michael Solomon said the study “is a really important part” of a successful implementation of St. Paul’s minimum wage ordinance. “The city supports the legislation that gives the Fed the data it needs to conduct the study.”

St. Paul instituted a minimum wage of $15 per hour, indexed to inflation, in 2018. It is set to begin in 2020.

Passed a year earlier, the Minneapolis ordinance phases in the $15 per hour minimum wage. Large employers must pay $15 per hour by 2022, and small employers must reach that rate by 2024.

 


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