Ann Markusen, Jennifer Ebert, Martina Cameron, Project on Regional and Industrial Economics, The Humphrey Institute of Public Affairs, University of Minnesota, September 2003

The minimum wage in Minnesota, once considered to be a living wage and enough to keep a worker out of poverty, has continually eroded in real terms since 1968, falling from $8.27 in real purchasing power to $5.15 today. In other states with comparable economies to ours, voters and/or the legislatures have raised their minimum wages to between $6.50 and $7.00, sometimes with built-in cost of living adjusters. In this brief, we profile the Minnesota individuals and regions that would benefit from a substantial increase in the minimum wage. We summarize what is known about the minimum wage and the impacts of an increase on workers, consumers, businesses, aggregate levels of employment, welfare, training and the state budget. We compare it to another highly acclaimed mechanism for improving the income distribution, the earned income tax credit.

Download A Substantial Minimum Wage Hike for Minnesota: Benefits, Costs and Economic and Political Consequences