In opposition to the current minimum wage campaign in Madison, a recently formed student organization is working to spread awareness of the potential for job loss that could follow a citywide increase in the minimum wage.
“It’s simple economics here. It’s going to deter businesses from coming to Madison that do not need to be in Madison,” founder of Citizens for Sane Economic Policies Frank Harris said.
Harris, who is a former District 8 City Council candidate and chairman of the University of Wisconsin College Republicans, argued that Madisonians would lose their jobs because employers paying higher wages must resort to price increases to fund the new salaries. In turn, employees could be given fewer hours and possibly be laid off, he said.
The Madison Fair Wage Campaign is currently working to collect 12,853 signatures in order to add the referendum to the Feb. 17 presidential primary ballot. As of last Sunday, the campaign has collected 3,551 signatures, Ald. Austin King, District 8, a primary organizer of the campaign, said.
If approved by voters, the minimum wage in the city of Madison would increase to $7.75 in general and to $3.88 for tipped employees.
UW professor of real estate and urban land economics Stephen Malpezzi said while an increase in minimum wage may cost jobs, it will still raise the quality of living for workers.
Malpezzi said the lower the current minimum wage is and the more modest the increase in the minimum wage, the less job loss will result.
“The reality is that there’s not a simple answer. [A raise in minimum wage] will hurt some people and benefit others,” he said.
Malpezzi suggested a better way to raise families out of poverty may be to expand the earned income tax credit program, which is a federal government policy allowing families who earn low incomes to receive income credit as a supplement.
King said, however, that the wage of $7.75 was chosen because it will affect only the 10 percent of workers who aren’t already earning $7.75. Because the number of affected workers is small, King said he is confident there will not be any substantial job loss.
King said the campaign is based on facts from other cities’ municipal minimum wage campaigns, which show no job losses as a result of the increase despite lobbying efforts by “big business and their Republican allies.”
“We have all the economic data in the world to back us up,” King said.
Independent business owners disagree the increase will help workers in Madison.
Bullfeather’s owner Richard Lyshek said most bar and restaurant owners who have tipped employees will not pay employees more if the minimum wage increases, but instead will enforce reporting all tips earned more vigorously.
Lyshek said tipped employees “skirt around” what their tips are so employers pay them more in wages, but with a wage increase, employers will force tipped employees to be more honest about what they earning.
“That’s what’s going to happen. There’s no question about it,” Lyshek said.
Harris said fewer employees could mean diminished service quality for a business. In addition, the increasing prices could increase the cost of living for Madison residents.
“It is obvious that if this referendum goes through, future and current jobs in Madison will be lost to surrounding cities, counties and states,” Harris said in a press release.
In the organization’s mission statement, Harris gave the example of a manufacturing plant located in Fitchburg instead of Madison because of the higher wage. A plant that can base workers’ salaries off of a lower minimum wage can remain competitive through lower prices. By remaining competitive, the company is allowed to grow, hire more workers and create more room for advancement within the company.
Also, Harris said in the statement that the city could lose tax dollars if companies choose not to establish locale within it.
He said CSEP is a non-partisan organization, but has received most of its support from UW College Republicans.
