Throughout the country, politicians and citizens are debating whether the minimum wage should be raised. While political gridlock in D.C. has thwarted any genuine attempts to raise the federal minimum wage, states have been raising their own minimum wages. Along those lines, Wisconsin legislators have introduced legislation that would raise the state minimum wage. Of course, Gov. Scott Walker has publicly opposed such legislation due to his fervent support of supposedly free market economic policies. But if Walker truly wants to improve the Wisconsin economy (which I’m sure he does since he hopes to be re-elected in 2014), then he must expend his political capital and support an increase in Wisconsin’s minimum wage.
It was just a little more than 50 years ago when President Lyndon Johnson declared war on poverty. Since then income inequality has continued to increase in the U.S. In fact, the current level of income inequality is the highest it’s been in nearly 100 years. For example, the Guardian reported that according to analysts at WealthInsight, 1.1 million new millionaires were created under President Barack Obama’s administration from 2008 to 2012. Additionally, CNBC reports that according to Credit Suisse, 1.7 million new millionaires were created under the Obama administration in one year: 2013.
Why is income inequality currently increasing to record levels? At the risk of oversimplification, the answer is that the wealthiest Americans have unduly influenced the political process with their campaign contributions and the hiring of corporate lobbyists. As a result, the wealthiest Americans have, as a whole, gotten richer while middle and lower class Americans have seen their wages and wealth stagnate. Illustrative of this is a study conducted by the Government Accountability Office which showed that between 1998 and 2005, two-thirds of American corporations paid no income tax. Moreover, according to the Tax Policy Center, 7,000 American millionaires paid no federal income tax in 2011. Thus, it seems the U.S. has entered a new Gilded Age — one that is not dominated by the likes of John D. Rockefeller, Andrew Carnegie and J.P. Morgan, but one that is instead dominated by the likes of Charles Koch, David Koch and Sheldon Adelson.
This rising income inequality has resulted in a national debate about income inequality and the minimum wage. As Obama said last month, “I believe this [income inequality] is the defining challenge of our time.” Obama is not the only person to discuss the problems of income inequality, though. Echoing the sentiment, Robert Reich, Obama’a former labor secretary, has said, “It [income inequality] is a threat to our way of life.”
In order to lessen some of the negative effects of rising income inequality, individual states have been raising their state minimum wage. In fact, 13 states have already raised their minimum wage in 2014 because of either legislation or adjustments to the cost of living in their state. Though Wisconsin has not raised its state minimum wage since 2009, Democrats in the Wisconsin Legislature have introduced legislation that would raise the state minimum wage to $10.10 per hour. But, Walker opposes this economic legislation. As he said earlier this month, “I’m focused on jobs, I’m not focused on political stunts…I’m focused on helping people get jobs that pay far more than the minimum wage.”
It’s ironic that Walker says he’s focused on creating jobs because the last time I checked he wasn’t even close to fulfilling his campaign promise of creating 250,000 jobs. Walker can’t even blame the 2008 economic collapse for preventing his administration from creating jobs because Minnesota has been creating jobs and economic growth while Wisconsin’s economy has struggled. Only one thing can explain the economic growth in Minnesota and the economic stagnation in Wisconsin: Democrats control the governorship and Legislature in Minnesota, while Republicans control the governorship and Legislature in Wisconsin. Thus, Walker’s policies have been hindering Wisconsin’s economic growth instead of fostering economic growth.
If Walker wants the state economy to improve, he needs to step beyond partisan lines to advocate for a raise in the state minimum wage as Wisconsin Democrats have proposed. A raise in the minimum wage would have the Keynesian effect of stimulating other parts of Wisconsin’s economy. As Ralph Nader wrote in a Wall Street Journal op-ed, “a [2011] Chicago Federal Reserve study showed that for every dollar increase in the hourly pay of a minimum-wage worker, the result was $2,800 in new consumer spending from that worker’s household over the year.” If Walker wants the Wisconsin economy to improve and to have a realistic shot of getting re-elected, he must ensure that Wisconsin’s minimum wage increases in the near future.
Aaron Loudenslager ([email protected]) is a second-year law student.
