Twin Cities' wage hikes roasted after report exposes job-crushing fallout in Tim Walz's backyard

The working paper found that the phased minimum wage increases in Minneapolis and St. Paul were associated with a decline in employment, along with reduced hours for some workers that could complicate ongoing national pushes for higher wage mandates. 

The debate comes as progressive leaders continue to advocate for increasing the federal minimum wage to address rising living costs. First passed in 2017, the Minneapolis Municipal Minimum Wage Ordinance was established to increase the minimum wage in phases to eventually meet $15 per hour by July 2024. Minneapolis' minimum wage rose to $16.37 for all employers on Jan. 1, while neighboring St. Paul's rate rose to $16.37 for large businesses as part of phased wage increase. 

The Minneapolis Fed analysis found the wage hikes increased hourly pay but reduced available jobs and hours, with researchers estimating that Minneapolis lost 5,425 jobs and St. Paul lost 3,797 jobs between 2017 and 2021 because of the minimum wage increases. 

The restaurant sector was hit especially hard, according to the report. Full-service restaurant jobs fell nearly 36% in Minneapolis and nearly 20% in St. Paul between 2018 and 2023, according to the Fed data cited by the Minnesota Star Tribune.

"We demonstrate that establishments with larger exposure of their labor costs to the minimum wage experienced larger increases in their wage and larger declines in their jobs, hours, and wage bill," economists stated.

Social media critics seized on the findings, arguing the report confirmed long-standing warnings that aggressive wage mandates can reduce jobs and hours.

The findings come as progressive Democrats continue pushing to raise the wage floor well beyond the long-standing $7.25 federal minimum wage. Rep. Alexandria Ocasio-Cortez, D-N.Y., has argued that a $15 minimum wage is no longer enough for workers, while other left-leaning lawmakers and city leaders have backed proposals ranging from $20 to $25 or more. 

Fox News Digital reached out to the office of Gov. Walz and the Cities of St. Paul and Minneapolis for comment.

Fox News Digital's Amanda Macias contributed to this report.