Even before the city of St. Paul increased the citywide minimum wage last year, some restaurants and retailers began dropping jobs and shedding hours.
Full-service restaurants — those with wait-staff and sit-down service — saw jobs decline by 16 percent. Limited-service restaurants, such as fast-food eateries, saw a 27 percent decline.
Minneapolis, which began hiking its minimum wage two years earlier, lost nearly 3,000 restaurant jobs during the same time, according to two new analyses from the Federal Reserve Bank of Minneapolis and the University of Minnesota.
But some St. Paul retailers and food service employers actually raised wages in 2018 and 2019, apparently in anticipation of the mandate, or in competition for workers with higher-paying jobs across the river. And a tight labor market in the months since has raised wages further.
With the goal of gradually moving toward a $15-an-hour citywide minimum wage over the next few years, St. Paul rolled out a wage schedule that requires most low-wage employers to institute annual increases, which began at $9.25 to $11.50 an hour as of July 1, 2020, depending upon business size.
Officials in both St. Paul and Minneapolis promised they would contract economists to analyze the impact on jobs, earnings and employment hours. It’s a task complicated by the COVID-19 pandemic, the recession, rioting and arson following the death of George Floyd, federal relief checks, a labor shortage, inflation and...
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