What's The Difference Between Minimum Wage and Living Wage in Minneapolis?

The federal minimum wage of $7.25 an hour is the required minimum amount employers must pay employees. States and local governments can set a higher minimum wage, and Minnesota is among the states with the highest minimum wage in the country, according to minimumwage.org. Still, minimum wage in Minneapolis falls below what some consider to be a living wage.

Minnesota raised its minimum wage rate from $8 an hour to $9 an hour beginning in August 2015 for large employers. In Minnesota, a large employer is one with receipts of more than $500,000 per year. Small employers will continue to meet the federal rate of $7.25 an hour.

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The new rate hike will pay minimum-wage workers for large companies in Minneapolis $18,720 a year, based on a 40-hour work week.

A living wage is the amount needed to be self-supporting. Here’s the difference between those two pay rates if you live and work in Minneapolis.

A single adult must earn $11.01 an hour to be self-supporting, according to an analysis for the Massachusetts Institute of Technology. For a family of four in Minneapolis, one adult working must earn $24.21 an hour for the family to be self-supporting. Based on the cost of a number of living expenses in the area, the MIT report calculates the living wage in Minneapolis at $22,900 for a single adult and $50,357 per year for a family of four.

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A single adult earning minimum wage would make about 82 percent of the living wage in Minneapolis. An adult would make about 37 percent of what is needed to support a family of four.

Many jobs considered low paying are paid at a rate above the federal minimum wage and are close to the living wage for singles, according to FindTheBest.com. Restaurant hosts earn about $9 an hour if the employer is large or $8.58 for a small employer. Hotel bellhops in Minneapolis earn at least $9 an hour. Theater ushers currently make $9 an hour on average.

Positions in Minneapolis that could pay a living wage include a drafter, who earns about $49,350 a year. Sales people in Minneapolis earn an average of about $50,100 a year. A chef or head cook in Minneapolis earns an average of $50,230. If you are employed as an executive assistant, you can expect to earn about $50,440.

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