Minimum Wage Non-Compliance in Minneapolis

Using Current Population Survey (CPS) Merged Outgoing Rotation Group data from the U.S. Census Bureau—considered to be among the best publicly available data on hours and earnings—the following memo breaks down minimum wage theft trends in the Minneapolis-St. Paul metropolitan statistical area (MSA, excluding Wisconsin) by industry, job, and worker characteristics. Industry violation estimates are further compared to complaint data from the Minneapolis Labor Standards Enforcement Division (LSED) to begin to understand how employer violation rates and worker complaint rates compare across sectors.

Among our key findings:

1. Minimum wage violations in the greater Minneapolis-St. Paul metropolitan statistical area (MSA) cost Minnesota workers an estimated $886 million over the past decade, an average of nearly $90 million a year. We estimate that over 32,000 low-wage workers in the metro area are paid below the minimum wage each year, with an average annual underpayment of roughly $2,700 per worker.
2. Minneapolitans in food services, social assistance, personal and laundry services and arts, entertainment and recreation disproportionately experience minimum wage violations compared to other sectors. Workers in low-wage service jobs related to personal care, food preparation, and landscaping are particularly likely to experience minimum wage theft.
3. LSED is alone amongst U.S. local labor standards enforcement agencies in its commitment to directed investigation. The industry violation estimates presented here suggest that LSED is successfully targeting high-violations industries within its proactive efforts, yet violations remain widespread across these industries.
4. Black workers and Latinx workers are significantly more likely to experience minimum wage theft than white workers. Workers of intersecting marginalized identities are more likely to experience wage theft; Black female noncitizens are nearly four times as likely to experience a minimum wage violation as a white male citizen.
5. Young, female, and part-time workers experience disproportionately high rates of wage theft, as well as those that didn’t graduate from high school.
6. There is notable overlap between the highest-violation industries in Minneapolis and the fastest-growing sectors within the greater Twin Cities region, suggesting an urgent need for proactive enforcement efforts.