Senate Democrats released their plan Wednesday during a Capitol news conference that outlined their agenda and addressed raising the minimum wage.
Wisconsin Families First consists of several legislative proposals such as raising minimum wage, restoring funding to local schools and expanding health care choices.
Increasing minimum wage from $7.25 to $10.10 per hour has advantages and disadvantages, Russell Coff, Wisconsin Naming Partners Chair of Strategic Management at University of Wisconsin, said.
“It’s a point of concern because with the hourly wage of $7.25, it is difficult to support a family,” Coff said. “However, if raising minimum wage is mandated, there could be a broader effect on the economy as the employers would hire fewer people.”
Coff said the people who endorse the idea of raising the minimum wage assume the number of employed people and the hours they work will remain constant. However, that is not a fair assumption to make, because employers would adjust their business model as the cost of each employee rises with the higher minimum wage, Coff said.
It is also not realistic to think that the business owners are making a lot of money, Coff said, as many small businesses are run with part time employees.
“So if the minimum wage goes up, either the employer will hire less people or the cost of the products will go up and everyone has to pay more,” Coff said. “Does it make the society better-off in the whole – I can’t say if it is.”
Conor Williams, Economic Policy Analyst at the Community Advocates said if minimum wage were to rise, there may be broader impacts on people that are currently employed.
“Those who are on the minimum wage will be significantly benefitted as their wage will go up, and on the other side, some people will be driven out of the job as the cost of some businesses will increase,” Williams said.
Andrew Reschovsky, emeritus professor at the LaFollette School of Public Affairs said current empirical studies show minimum wage has little impact on negative employment.
“So, we need to pay minute attention on Wisconsin in this regard and determine the minimum wage – what sometimes is called living wage,” Reschovsky said.
The Walker administration previously denied a request to raise the minimum wage last October, saying the current rate was a livable wage for residents.
