Gov. Jim Doyle’s recent proposal to raise the state’s minimum wage received statistical support Monday in a report by the Center on Wisconsin Strategy at the University of Wisconsin.
The center found that raising the minimum wage to $6.80 an hour would benefit more than the 130,000 Wisconsin low-wage workers.
“People often think of the minimum wage applying mostly to teenagers with part-time jobs, but that’s wrong. Most minimum-wage workers are adults, and a large share of them are working full time,” COWS director Joel Rogers said. “No parent who works full-time should be miserably poor.”
Opponents of the increase argue that the loss of job opportunities would outweigh its benefits. They also argue that a minimum-wage increase would help teenagers and high-income part-time workers, as opposed to low-income workers who need a wage boost.
Historically, Senate Majority Leader Mary Panzer, R-West Bend, has voted against raising minimum wage, saying the increase could hurt Wisconsin in competition with other states.
“Our concern would be the loss of jobs that would result from raising the minimum wage,” Panzer spokesman Greg Hubbard said.
However, the report, entitled “Raising the Floor: Who Would Benefit from a Minimum Wage Increase in Wisconsin,” claims to disprove these concerns.
“Studies of past minimum wage increases also indicate that no appreciable job loss would occur in Wisconsin from such a wage increase,” the report states.
The center’s research relies on data provided by the Economic Policy Institute in Washington, D.C. The report indicates that the majority of workers — 57.5 percent — who would directly benefit from the increase are adults. More than two-thirds of these workers are employed more than part-time. Nearly a third are working full-time.
The report also said that in addition to the 130,400 workers who would directly benefit from an increase, another 147,600 who currently earn between $6.80 and $7.80 an hour would benefit from a “spillover effect.”
“A modest increase in the minimum wage is pretty much what economists don’t believe is possible, namely a ‘free lunch,'” COWS research director Laura Dresser said. “We used to think there were heavy negative employment effects that offset the positive wage effects, but research showed that we were just wrong.”
Rogers added that raising the minimum wage to $6.80 an hour only corrects for inflation because the current amount, $5.15, is below the historic level. If the minimum wage kept pace with previous economic growth, the wage would now be $11 an hour, demonstrating how low the wage has dropped and how easily an increase could be adjusted, Rogers said.
“There’s a direct correlation between minimum wage and quality of life for thousands of workers,” COWS Senior Policy Associate John Keckhaver said.
Since the last federal minimum-wage increase in 1996-97, the number of states with minimum wages higher than the federal level increased from six to 12, including Washington, D.C. Reviews of total employment in Wisconsin after this raise show no evidence of declining job growth.
To see the entire report, check out the COWS website, www.cows.org.
