Minnesota minimum wage to increase on Jan. 1

Minnesota’s minimum wage will increase to adjust to inflation on Jan. 1, 2021, the state Department of Labor and Industry announced Monday. 

The minimum wage for large employers will increase from $10 an hour to $10.08 an hour. The minimum wage for small employers and youth under 18 will increase from $8.15 to $8.21. 

The state minimum wage rates do not apply to work performed in Minneapolis and St. Paul, which have higher minimum wage rates.

The minimum wages for employers of different sizes in both cities will reach $15 in various years from 2022 to 2027 and will be adjusted for inflation thereafter.

As of February 2020, an estimated 8.5% of jobs in Minnesota paid the minimum wage or less, although that was before the COVID-19 pandemic had a significant impact on the state’s economy, according to a news release. 

DLI also released the 2020 Minnesota minimum wage report on Monday. The report found the actual annual earnings in 2020 for workers earning the Minnesota minimum hourly wage and working 40 hours a week was $20,800 for workers at large employers and $16,952 at small employers. 

Workers in Minneapolis earned annual full-time wages of $26,520 at large employers and $23,660 at small employers, while St. Paul workers earn $22,360 at large employers and $20,800 at small employers, according to the report.