Despite the United States’ classification as a developed country, 1,650,000 households were living in extreme poverty in 2014, defined as “$2 or less per person per day in a given month.” While our country is far from destitution, with higher standards of living and a consumer society, there’s a group of people that slips below the radar all too easily.
After realizing the alarming fact that the number of households living in extreme poverty increased by approximately one million from 1996 to 2011, many have become proponents of raising the minimum wage. Rep. Melissa Sargent, D-Madison, is one of them, having proposed a bill to eventually raise Wisconsin’s minimum wage to $15.
Democrat introduces bill to increase Wisconsin minimum wage to $15 per hour
My first reaction to this piece of news was the realization that $15 is more than double the minimum wage in Wisconsin, which sits at the federal minimum of $7.25. I am against the proposal; I find it ridiculous, especially as it would strain small businesses.
To clarify, I’m not against raising the minimum wage completely. It’s clear that the modern American family cannot survive on the federal minimum. My deep aversion to Rep. Sargent’s proposal is rooted in the reality that such a dramatic increase in employee wages will simply put too much strain on businesses. According to the Employment Policies Institute, for every 25 cents the minimum wage is increased, an employer with 20 employees will shell out $10,000 in wages.
Placing this burden on employers will only hurt the employment rate, as bringing on new workers is a greater commitment and risk for business owners. It’s also likely that prices would increase as well. This, in effect, nullifies part of the incentive to raise minimum wage: increasing the buying potential of workers only to pour money right back into local and state economies.
Much attention has been given to the state of Washington these past few years, which has the highest state minimum wage of all the states in the country, $9.47 an hour. Supporters of Rep. Sargent’s proposal (few and far between as the bill faces little chance of passing) could find grounding for their argument in Washington’s strong job growth. However, national statistics have shown minimum wages above the federal level do not indicate increased job growth. In 2013, the Bureau of Labor Statistics reported states with minimum wages above $7.25 an hour had higher unemployment rates than states that did not, with the same trend seen for teenage workers earning minimum wage.
It seems Washington’s excellent track record is based on its practice of raising wages with inflation. Under Rep. Sargent’s bill, Wisconsin’s minimum wage would go up to $8.50, then to $15 five years after the law hypothetically would go into effect. I am sincerely confused as to how she thinks businesses can handle that burden.
Wisconsin would be better off raising minimum wage according to inflation rates. Eleven states currently index their minimum wages to inflation, and did slightly better in employment in addition to evidence real wages went up as a result.
Do I think raising minimum wage to begin with can lend itself to decreasing the number of people suffering below the poverty line? I don’t know. I’m not an economist or a seasoned analyst, but from my vantage point, it appears there’s a strong contention as to establishing clear cause and effect between wages, job growth and the economy. There are numerous instances of correlations, but I suppose if experts were sure of the data they were seeing, poverty wouldn’t be the prevalent problem it is.
While Rep. Sargent’s proposal is nonetheless ridiculous, at the very least, she fuels the conversation about minimum wage and directs attention to those suffering below the poverty line within our state borders.
Megan Stefkovich ([email protected]) is a freshman majoring in biology.
