Minneapolis approves gradual rise in minimum wage to $15 an hour
$15 Minimum Wage REUTERS/Lucas Jackson

The Minneapolis city council approved a measure on Friday requiring large companies to pay workers least at $15 an hour by 2022, a 58 percent increase, joining a trend by liberal-leaning cities across the country to boost living standards for low wage earners.

The measure, approved by a vote of 11 to 1, will extend the required $15 minimum to smaller businesses in Minnesota's largest city by 2024. Businesses of all sizes, including fast-food chains, must begin paying at least $10 an hour by Jan. 1.

Supporters of the $15 minimum wage in Minneapolis and other cities believe it provides a floor of support for those on the lowest rung of the economic ladder, including many single mothers and children. But critics say required pay increases lead to layoffs and force some employers out of business.

"The bottom line here is that we have huge disparities in our country and this is one of the ways we can address that," City Councilwoman Linea Palmisano said at the council meeting.

In Minneapolis, a city with about 415,000 residents, the measure will provide a lifeline to the more than 70,000 workers who stand to benefit from the increase, supporters say. But it is likely to be monitored closely for any negative impact on the labor market.

Minnesota's current minimum wage - $9.50 for large businesses and $7.75 for small companies - is already the highest in the Midwest.

"There's going to be intense scrutiny of what happens with this minimum wage and I think that's right," City Councilwoman Elizabeth Glidden, one of the authors of the proposal, said on Friday after the measure was approved.

City Councilman Blong Yang, who cast the lone dissenting vote, said he was concerned the ordinance would overburden small businesses, including many owned by minority groups, and would raise prices in the city.

"We cannot make Minneapolis an island," Yang said at the meeting.

Los Angeles, the nation's second-largest city, as well as San Francisco, Seattle and some other urban areas have approved measures to increase base pay to $15 an hour.

California, under a law approved last year, is the only state that has set a $15 target for all workers, which it plans to reach in 2022.

Maryland and Oregon and the cities of Washington, Los Angeles and San Francisco have previously approved minimum wage hikes taking effect on Saturday, according to the Economic Policy Institute.

(Reporting by Alex Dobuzinskis in Los Angeles, Editing by Frank McGurty and Richard Chang)