by Rachel Vilsack —
A blog last month looked at the issue of Minnesota’s minimum wage. As the Minnesota Legislature resumed session this month, there has been continued discussion on increasing the state’s minimum wage. This raises the question: How many jobs, in which regions, and in which occupations, would be affected if there were a substantial increase in the state minimum wage? To find the answer, we take the higher minimum wage level of the House bill (HF0092), $9.50 an hour for large employers, and estimate how many jobs would see wages increase to meet the new level.
Overall, 387,710 jobs in Minnesota, or 14.7 percent of total occupational employment, paid under $9.50 an hour during first quarter 2013 based on the employment and wage estimates. This percentage varies by region as seen in the Figure below. The Twin Cities Metro (12.5 percent) and Southeast (16.3 percent) regions had the lowest percentage of jobs paying less than $9.50 an hour, while Northeast (19.8 percent) and Southwest (19.7 percent) had the highest percentage of jobs that would be impacted by an increase in the minimum wage.
The following industries have the biggest share of jobs paying less than $9.50 an hour: accommodation and food services (58.5 percent); retail trade (44.1 percent); arts, entertainment and recreation (41.5 percent); administrative and support services (30.4 percent); other services (26.8 percent); agriculture, forestry, fishing and hunting (23.4 percent).
The following occupational groups have the biggest share of jobs paying less than $9.50 an hour: food preparation and serving related (62.9 percent); sales and related (30.8 percent); building and grounds cleaning and maintenance (27.5 percent); personal care and service (26.7 percent); farming, fishing and forestry (20.9percent); transportation and material moving (15.6 percent); arts, design, entertainment and media (10.6percent).
Occupations with the highest percentage of jobs paying less than $9.50 per hour are highly concentrated in the leisure and hospitality sector. Other occupations where a portion of jobs pay less than $9.50 per hour include: cashiers (62.1 percent); maids and housekeeping cleaners (43.7 percent); helpers, production workers (41.2 percent); child care workers (40.2 percent), pharmacy aides (27.4 percent); teacher assistants (20.6 percent); and home health aides (15.6 percent).
The exact number of jobs that would be affected by a proposed $9.50 an hour minimum wage might not be known, but the increase could be expected to have varying impacts across regions and occupations as suggested by these estimates. Additional analysis would be required to estimate the effect of the proposed minimum wage increase on consumer spending power in Minnesota, the effect on individuals and families who depend either fully or partly on minimum wage incomes, and the channels of adjustment employers would likely use to absorb the increased wage bill. Understanding the number and share of affected jobs and job openings is an important first step toward helping communities and their representatives make informed choices in the coming legislative session.