Mayo Clinic raises pay increases more than previously planned, citing inflation concerns

Mayo Clinic announced this week a guaranteed minimum wage increase of 4% for workers this year, up from raises of at least 2% announced a few weeks ago.

The clinic attributed the change to record-setting rates of inflation, which have been particularly high in Mayo's hometown of Rochester as well as other regional centers beyond the Twin Cities.

With operations in Minnesota and four other states, the nonprofit group employs more than 70,000 people overall including 45,440 in Minnesota.

"With inflation at the highest rate in years, it may disproportionally affect the lives of our staff members at the lower end of the pay scale," the clinic said in a statement. "Mayo Clinic's pay over the past 15 years has stayed consistently above the consumer price index, an important measure of the cost of living and inflation."

Across the U.S., the consumer price index in January hit 7.5%, which was the highest level since 1982. Data for November showed the Twin Cities metro with an inflation rate of 7.2%.

In an analysis of smaller markets, Moody's Analytics found inflation rates during the last months of 2021 were above 8% in Rochester, St. Cloud, Mankato, Fargo and La Crosse, Wis. Duluth was just below that level.

Mayo Clinic has posted strong financial results through the first three quarters of 2021, earning just over $1 billion in operating income — a total that already surpasses 2020's full-year results of $728 million. The clinic is expected to release full 2021 financial results later this month.

The wage increases announced this week are effective March 16. Staff who would have received less than 4% under the previous pay formula, or would not have received an increase because they were at or over the top of their pay range, will now receive 4% increases, the clinic says.

Staff members whose increases would have exceeded 4% under the previous formula still will receive the higher value.

In addition, the clinic says that workers who earn less than $21 per hour will receive an additional stipend for hours worked from March 16 through Nov. 22.

"Pay, which is typically the largest aspect of compensation, is set at or above what other organizations report they pay people in similar roles," Mayo said in a statement. "Allied health staff have received consistent salary increases in Mayo's history."