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Decker proposes increase for minimum wage

Amid hesitation from state Republicans, State Senate Majority Leader Russ Decker, D-Weston, announced a proposal Thursday to raise the minimum wage in Wisconsin as a first order of business.

The proposal would raise the state’s minimum wage from $6.50 an hour to $7.60 an hour. The current minimum wage level was implemented in June 2006. If passed, the new wage hike would take effect in June 2009.

In addition to raising the baseline minimum wage, the proposal aims to allow for adjustments to the minimum wage through time with respect to the rate of inflation.

Barb Worcester, a spokesperson for Decker, said the minimum wage increase would help lower-income families afford basic necessities and would ultimately benefit the economy.

“By paying people a wage that allows people to support their families, we help our economy,” she said. “In addition to helping out families, we will likely see less people dependent on social programs, such as food stamps.”

Worcester added she is optimistic the measure will pass due to the great consensus among the Democrats.

Glen Cain, University of Wisconsin professor emeritus of economics, said the increase could hold back the already struggling economy.

“It appears we’re headed into a recession,” Cain said. “A minimum wage increase at this time could aggravate (the) already poor economy by increasing the cost of production for employers.”

On the other hand, Cain said, the impact of minimum wage increases on the economy is not completely clear.

“There is a lot of disagreement among economists about the magnitude of minimum wage increases on lower-wage workers and small businesses,” Cain said.

Cain added some economists believe minimum wage increases can enhance the purchasing power of people at the lower end of the pay scale and may ultimately benefit the economy.

Ryan Murray, a spokesperson for Senate Minority Leader Scott Fitzgerald, R-Juneau, said the plan was well-intended but misguided.

“Increasing the minimum wage is one of those things that sounds good on the surface,” Murray said. “But when you dig a little deeper, there are a lot of problems with it.”

Murray said a minimum wage hike has more than just increased costs for small businesses but will have many “drastic implications.”

“Increasing the minimum wage puts the jobs of people at the bottom end of the pay scale in jeopardy,” he said. “It punishes small businesses and forces them to cut employees.”

Worcester rejected Murray’s claim, saying evidence exists suggests minimum wage increases help the economy.

“There is data that disputes the argument that increasing the minimum wage hurts small business owners,” she said. “We just don’t think that’s the case.”

Murray agreed with Worcester’s prediction that the proposal will pass the legislature when it is introduced.

Wisconsin is one of seven states with a minimum wage lower than the federally-designated level of $6.55 an hour. In July 2009, the federal minimum wage will be raised to $7.25 an hour.