How beneficial would a $15 minimum wage be for Wisconsinites?

A state senator and UW-Madison economist weigh in.
Published: Jan. 27, 2021 at 10:12 PM CST|Updated: Jan. 27, 2021 at 10:29 PM CST
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MADISON, Wis. (WMTV) - A bill introduced Wednesday by Senate Democrats to hike up the federal minimum wage is reviving a years-long debate in Wisconsin.

State Senator Melissa Agard (D-Madison), a former Assembly representative, has been one of the most vocal proponents of a $15 minimum wage as set by the state. She argues that the issue is not only about money but also dignity-- particularly during the pandemic.

“No one, in my opinion,” she said, “should be working full time, oftentimes more than full time, putting themselves on the line with their health and safety and security and not be able to take care of themselves and their family.”

At $7.25/hr, Wisconsin’s minimum wage has stayed the same since the federally mandated increase of 2009. Agard says more than doubling the current wage floor could actually save the state money.

“When people are paid less than $15/hr, there is a cost to the state. We’re helping people pay for their childcare, we’re helping people pay for their food, we’re helping people pay for their housing. No one wants to be accepting this public assistance people want to take care of themselves,” she said.

Noah Williams, an economist at UW-Madison, said he is against an increase in the minimum wage.

Williams points to 2019 projections from the Congressional Budget Office. With $15/hr officials estimate 1.3 million people would be pulled out of poverty. Another 1.3 million people, however, would lose jobs.

Besides unemployment, Williams predicts other adverse effects to impact industries like retail and food service, which are among the top to employ minimum wage workers. If employers decide not to lay staff off, they could cut back on hours. They could rely more on robots over people (think kiosks at McDonald’s replacing over-the-counter service). The price of low-wage output could also increase.

The impacts of a higher wage floor may vary greatly across the state, Wiliams adds, from rural to urban areas. He suggests in Madison there may not be much change because many low-wage jobs already start at $15/hr.

Williams says the bill in Congress is “certainly well intended,” but adds, “If we want to increase incomes for lower-income people, there are more direct ways to do so.” He suggests the Earned Income Tax Credit, which for qualifying taxpayers, can reduce the taxes owed and increase a refund.

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