Wisconsin Budget

Most States Hike Minimum Wage

Wisconsin is among 24 states that have kept it at $7.25 an hour.

By , Wisconsin Budget Project - Jan 5th, 2017 10:33 am
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Low-paid workers across the country got a raise this month, as 19 states increased their minimum wages. A higher minimum wage means that workers will be better able to make ends meet and support their families, but the benefits don’t end there. More income in the pockets of workers translates to additional economic activity, and workers spend their raises at local businesses buying groceries, getting their cars fixed, or paying off medical bills.

The 19 states that increased their minimum wage this month are Massachusetts, Washington, California, New York, Arizona, Maine, Colorado, Alaska, Florida, Missouri, Montana, New Jersey, Ohio, South Dakota, Arkansas, Connecticut, Hawaii, Michigan and Vermont.

Unfortunately, Wisconsin workers and communities will not receive any of the benefits of a higher minimum wage. Wisconsin is among the minority of states that have a minimum wage stuck at $7.25 per hour, a level that was last increased in 2009.

Unlike Wisconsin, Most Other States have Minimum Wages Higher than $7.25

Unlike Wisconsin, Most Other States have Minimum Wages Higher than $7.25

Because Wisconsin is not among the states that have set a higher minimum wage, a full-time, full-year worker in Wisconsin still earn as little $14,500 per year. A single parent working full time in Wisconsin at the minimum wage would earn less than the poverty level. Wisconsin state lawmakers have prohibited local governments from setting their own higher minimum wages.

Workers in Wisconsin have a lot to gain from an increase in the minimum wage. Nearly a quarter of the state’s workforce, or 654,000 workers, would get a raise if we raised the minimum wage to $12 by 2020. One-third of the workers who would get raises are older than 25, according to the Economic Policy Institute.

Workers wouldn’t be the only people in Wisconsin who would benefit from an increase in the minimum wage. Raising the wage would improve the economic well-being of 284,000 Wisconsin children whose parents would get raises.

Wisconsin residents whole-heartedly support raising the minimum wage. Just over half of residents want the minimum wage set at $15 an hour, according to a recent poll by Marquette University. That’s an astounding display of support, considering that that the survey asked about a minimum wage level that is more than double the current minimum in Wisconsin, and significantly higher than any other state’s current minimum wage.

Wisconsin lawmakers continue to refuse to increase the state’s minimum wage, letting inflation eat away at its value a little more each year. Lawmakers’ failure to act damages the prospects of families who are working hard to climb the economic ladder. It also harms the state’s economy, depriving it of the extra money those families would spend at local businesses. For now, Wisconsin workers will have to look across state lines to observe the benefits generated by a higher minimum wage.

32 thoughts on “Wisconsin Budget: Most States Hike Minimum Wage”

  1. Ben Noffke says:

    If you want to make $7.25 more valuable, we should lower the minimum wage, not increase it.

    If you want to make $15.00 more valuable, again, lower the minimum wage, don’t increase it.

    Perhaps we should increase the minimum wage 100x to $725.00 per hour. This way, all coins can be eliminated, and the dollar bill will be the new penny.

    It doesn’t matter what the minimum wage is….it will ALWAYS BE considered the minimum wage.

  2. Jason says:

    Maybe the dishwashers should be paid the equivalent wage as the waitress and the bartender. Correction, the dishwashers have been replaced by a dish wash machine. Maybe, the bar back should be paid as much as the bartender and the waitress and it was. The waitress now does not collect tips but she and the bar back both make $15 an hour. The bar back is satisfied he gets a significant raise and decides to work 20 hours a week instead of thirty hours. The waitress gets no raise and no tips and actually reports more to the IRS. The manager, who has been there the longest gets no raise and shows resentment at the bar back because she must now pick up the bar backs lost hours. The owner must raise his prices on the customer to make up for the increase in labor. Less customers come in to the restaurant due to the higher dinner tab. The owners sales fall and wonders if its worth his time and his investments to keep open a questionable venture.

  3. Vincent Hanna says:

    I agree Jason. Who cares about bartenders and wait staff? If they want to make more money, go to college and get a degree.

  4. David Armstrong says:

    Wrong argument entirely. I’d like to see a detailed impact analysis of what an across the board $12.00 per hour or $15.00 per hour would be to businesses and consumers across the state. Keep in mind that you would need to raise all supervisory wages upline of those now getting the higher “minimum” wage as well. Would there be a rush to automation like has been seen in most of the areas of the county that have done this? More than likely, so the question then becomes where does this put the low skill/no skill worker other than fighting for fewer and fewer low skill/no skill jobs. I would rather see money pour into training programs to provide careers for low skill workers.

    We are rural (NW Wisconsin) and frankly I don’t know of any minimum wages jobs here. The local McDonald’s is hiring at $10.25 per hour. I think possibly some very small mom and pop businesses may be in the $8.00 an hour range in the region but frankly they will not find anyone that will stay at those low wages as we have more jobs available than we have people.

    Don’t get me wrong, I’m not against a slightly higher minimum wage but think that is a short view and political talking point right now. The long view would be to get people into careers. We have created a poverty to prosperity program that works with those in poverty to find a career that interests them, provide training in that career and then placement. The program features a mentor that works with the person to provide guidance and education on day to day living issues. I would like to see more initiatives like this to provide training and life skills to those in poverty rather than artificially raising pay with no corresponding growth in skills.

  5. happyjack27 says:

    David, for 30 straight years the real wages of goods producing workers as a fraction of productivity has been the equivalent of $22 / hour today.

    https://thecurrentmoment.files.wordpress.com/2011/08/productivity-and-real-wages.jpg

    So if you want your study I suggest you look at the period of 1945-1975. That would be for $22, though. $12 of course is only about half that.

  6. AG says:

    Historically, using real 2015 dollars, the minimum wage has hovered in the $6-8 range. Only during the 60’s and several years in the 70’s did it ever go above $9/hr. Trying to legislate wages at $12-15 an hour is a gross over reach, unjustifiable and unprecedented. Either that, or the proponents of the $12-15 minimum wage know that by fighting for a ridiculously high amount it will make people more amenable to a more “moderate” $8-10/hr rate.

  7. happyjack27 says:

    That’s not how it works, it’s per-unit-productivity. Think of it as matching supply and demand. Had it stayed on par it should be $22. $12 is absurdly low wage per unit production.

  8. Bruce Murphy says:

    Data Wonk columnist Bruce Thompson examined the research, found $10 min wage would have very positive impact across the board, but found $15 minimum could be a problem: http://urbanmilwaukee.com/2015/04/27/data-wonk-push-for-15-minimum-wage-a-mistake/

  9. happyjack27 says:

    No he didn’t.

    He presented no evidence or argument that $15 could be a problem.

    He just asserted it as a possibility and appealed to the precautionary principle.

    Nothing but the cognitive bias known as the “anchoring effect”.

  10. AG says:

    Happyjack, there’s no justification for tying minimum wage to the BLS labor productivity measurement. There are too many other factors, technology changes, and shifting economies to high growth sectors to use that as a tool for minimum wage. This would also use a flawed assumption that all business sectors have seen the same productivity level increases.

    Besides, the productivity measurement is a lagging indicator. I believe the most common answer to your suggestion is that you’re looking at it wrong. Instead of looking at low wages not keeping up with overall productivity, you should instead ask why low skilled jobs don’t increase in productivity like other sectors of the labor force.

    Besides, what you’re suggesting is anything BUT supply and demand… supply and demand for minimum wage would necessitate no minimum wage laws and it would let the market set the rate.

  11. happyjack27 says:

    > Happyjack, there’s no justification for tying minimum wage to the BLS labor productivity measurement.

    false. an obvious justification is workers wages should be tied to amount of production.

    > There are too many other factors, technology changes, and shifting economies to high growth sectors to use that as a tool for minimum wage.

    all these factors affect efficiency and productivity. they are summarized by that metric, and thus are not “other factors”.

    > This would also use a flawed assumption that all business sectors have seen the same productivity level increases.

    obviously not. nobody is making that assumption.

    > Besides, the productivity measurement is a lagging indicator.

    okay, so then it should be more than $22. you said it, not me.

    > I believe the most common answer to your suggestion is that you’re looking at it wrong. Instead of looking at low wages not keeping up with overall productivity, you should instead ask why low skilled jobs don’t increase in productivity like other sectors of the labor force.

    who’s making assumptions?

    > Besides, what you’re suggesting is anything BUT supply and demand… supply and demand for minimum wage would necessitate no minimum wage laws and it would let the market set the rate.

    i think you’re confusing supply and demand with free market economics.

    supply is how much is produced.

    demand is how much is consumed.

    free market economics is the assumption that the system of differential equations which describe their relationship results in a negative feedback look that leads to self-stabilizing prices and production rates.

    which is not always true, btw. so for instance noble prize winning economist brian arthur. also it describes commodity price forces, not labor price forces. the two operate very differently.

  12. AG says:

    “false. an obvious justification is workers wages should be tied to amount of production.”

    Why? How? Do you always want wages at the same % of productivity? How do you set that level? If a machine doubles productivity and you fire one person, do you pay the other person double? I doubt you’d think so… what is your solution?

    “all these factors affect efficiency and productivity. they are summarized by that metric, and thus are not “other factors”.”

    That depends… are you using straight labor productivity or are you using the multifactor productivity? Your link doesn’t say… but I’m guessing it’s straight labor productivity. Even if multifactor productivity, there’s missing factors.

    > This would also use a flawed assumption that all business sectors have seen the same productivity level increases.

    “obviously not. nobody is making that assumption.”

    You must be making that assumption since you’re using the overall labor productivity numbers. For example, if we looked solely at the food service industry, productivity has gone down almost 2% from 2005-2015… yet wages went up around 5%. If we used productivity to set wages, there should be a wage cut.

    > Besides, the productivity measurement is a lagging indicator.

    “okay, so then it should be more than $22. you said it, not me.”

    Do you know how/why you look at leading vs lagging indicators?

    “who’s making assumptions?”

    Your whole argument, or should I say Elizabeth Warren’s argument, is based on flawed assumptions.

    > Besides, what you’re suggesting is anything BUT supply and demand… supply and demand for minimum wage would necessitate no minimum wage laws and it would let the market set the rate.

    “i think you’re confusing supply and demand with free market economics.

    supply is how much is produced.

    demand is how much is consumed.

    free market economics is the assumption that the system of differential equations which describe their relationship results in a negative feedback look that leads to self-stabilizing prices and production rates.

    which is not always true, btw. so for instance noble prize winning economist brian arthur. also it describes commodity price forces, not labor price forces. the two operate very differently.”

    OK fine, what I was suggesting is equilibrium price. I used the term supply and demand in the same way you did… so you’re really just nick picking your own statement that I carried forward.

    Either way, the rationale for using labor productivity is highly flawed and only used by liberals because it appears to create justification for minimum wage laws set at disastrous levels.

  13. happyjack27 says:

    >>“false. an obvious justification is workers wages should be tied to amount of production.”

    >Why? How? Do you always want wages at the same % of productivity? How do you set that level? If a machine doubles productivity and you fire one person, do you pay the other person double? I doubt you’d think so… what is your solution?

    raise the minimum wage. I thought that was obvious.

    >>“all these factors affect efficiency and productivity. they are summarized by that metric, and thus are not “other factors”.”

    >That depends… are you using straight labor productivity or are you using the multifactor productivity? Your link doesn’t say… but I’m guessing it’s straight labor productivity. Even if multifactor productivity, there’s missing factors.

    Okay, then we’ll adjust the estimate up then. say, $25?

    >>> This would also use a flawed assumption that all business sectors have seen the same productivity level increases.

    >>“obviously not. nobody is making that assumption.”

    >You must be making that assumption since you’re using the overall labor productivity numbers. For example, if we looked solely at the food service industry, productivity has gone down almost 2% from 2005-2015… yet wages went up around 5%. If we used productivity to set wages, there should be a wage cut.

    that i used an overall productivity score does not imply that all sectors productivity move in lock-step.

    please try to be more careful with your logical reasoning going forward. and your assumptions, ironically.

    >>> Besides, the productivity measurement is a lagging indicator.

    >>“okay, so then it should be more than $22. you said it, not me.”

    >Do you know how/why you look at leading vs lagging indicators?

    yes. a leading indicator indicates something is about to happen. a lagging one indicates that something has happened. you look at leading to project forward, and lagging to project backward. hence lead and lag.

    >>“who’s making assumptions?”

    >Your whole argument, or should I say Elizabeth Warren’s argument, is based on flawed assumptions.

    that was a rhetorical question. it is you who are making numerous assumptions, all of which are wrong.

    >> Besides, what you’re suggesting is anything BUT supply and demand… supply and demand for minimum wage would necessitate no minimum wage laws and it would let the market set the rate.

    >“i think you’re confusing supply and demand with free market economics.

    >supply is how much is produced.

    >demand is how much is consumed.

    >free market economics is the assumption that the system of differential equations which describe their relationship results in a negative feedback look that leads to self-stabilizing prices and production rates.

    >which is not always true, btw. so for instance noble prize winning economist brian arthur. also it describes commodity price forces, not labor price forces. the two operate very differently.”

    >OK fine, what I was suggesting is equilibrium price. I used the term supply and demand in the same way you did… so you’re really just nick picking your own statement that I carried forward.

    no i was not using supply and demand in that way. i only used those words ’cause i thought it would add you in grasping on to what i as saying. apparently not. apparently it backfired.

    it should have been obvious to you that i wasn’t using them in that way — well, originally — but it should have been even more obvious when i explained to you that i wasn’t, in my previous comment – the one you just replied to.

    > Either way, the rationale for using labor productivity is highly flawed and only used by liberals because it appears to create justification for minimum wage laws set at disastrous levels.

    you make a number of very bold (and partisan, and ad hominem (circumstantial, to be precise)) claims here without providing any evidence to support any of them.

    consequently they can all be dismissed out of hand.

  14. Vincent Hanna says:

    “create justification for minimum wage laws set at disastrous levels.”

    Isn’t the jury still out on that? For example: “Seattle’s labor market has thrived since the city became the first major metropolis in the country to pass a law setting its minimum wage on a path to $15 per hour.

    The city’s job-growth rate has been triple the national average, for example.

    Much of that success, though, can be attributed to trends separate from the minimum-wage law itself, such as the growth of Seattle’s tech sector and its construction boom, according to a new report that University of Washington researchers presented to the City Council on Monday.” http://www.seattletimes.com/seattle-news/politics/15-wage-has-little-impact-on-seattles-thriving-labor-market-report-suggests/

  15. AG says:

    Resorting to arguing about arguments again… a classic HappyJack move when you have poor support for your original premise.

  16. Vincent Hanna says:

    Also, while it’s not a perfect comparison, many point to Australia and its $16 minimum wage as a success story.

  17. happyjack27 says:

    “Resorting to arguing about arguments again… a classic HappyJack move when you have poor support for your original premise.”

    Do you really not see the irony in this statement?

  18. AG says:

    Vincent, you’re right, the sky hasn’t fallen in Seattle. We’ll see where they go in the next few years. If anything, the large/dense/expensive metro’s are probably the best place to raise minimum wages.

    Even if, the jury is still out and I anxiously await as future data tells us more. So far, most of what I’ve seen is anecdotal and/or hard to parse the actual affects of the wage hikes vs other outside influences. I’m sure we’ll understand more/better as time goes on.

  19. Vincent Hanna says:

    I’m not suggesting Seattle is proof that it’s a resounding success and no further evidence is needed, case closed. Just that it seems too early to draw conclusions one way or the other. And like every other issue this one is hyper-partisan. So liberal economists and think tanks will argue for it while conservative economists and think tanks will argue against it, each cherry picking data as necessary.

  20. happyjack27 says:

    …and i’m sure you’ll be saying that 10, 20, 50 years from now.

  21. happyjack27 says:

    Actually economists are pretty much united on raising the minimum wage.

  22. Vincent Hanna says:

    Conservative economists included?

  23. happyjack27 says:

    Most economists are liberals.

    (Which harks back to Bayes’ rule.)

    So “conservative economists” don’t end up being a significant factor in the overall.

  24. Vincent Hanna says:

    Slightly left of center overall. This is interesting. https://fivethirtyeight.com/features/economists-arent-as-nonpartisan-as-we-think/

  25. happyjack27 says:

    Yeah, and looking more closely I think I overestimated the consensus.

    The data and math is more important though. Pretty obvious that the trend of increasing economic inequality has been reducing consumption and thus slowing the economy (despite the technological gains largely offsetting things). Increasing the flow of capital by more equitably compensating labor is an obvious win-win. You improve economic mobility while stimulating the economy.

  26. Milwaukee Native says:

    #23, what do you base the statement that “most economists are liberals”?

    What about the recurring drumbeat for “supply-side economics”? Is it just politicians who like that model, and their donors who push it to benefit their own limited interests–even if it does not broadly benefit economies?

  27. happyjack27 says:

    What about the recurring drumbeat for “supply-side economics”?

    Does not come from economists. At least not well-educated ones. Trickle-down is generally derided as “Voodoo economics” and considered a disastrous failure.

  28. happyjack27 says:

    http://krugman.blogs.nytimes.com/2016/07/18/the-gops-original-sin/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs&region=Body&_r=0

    “I’m not sure, even now, whether people who aren’t involved in economic policy discussion understand that supply-side wasn’t a doctrine like monetarism or even real business cycles — ideas I may think are wrong, but which had and to some extent still have significant support from professionals in the field. Supply-side economics never had any evidence behind it; it never had any support in academic research; it barely even had any support among economic researchers and forecasters in the business world. It was and remains crank economics pure and simple, with nothing going for it except political convenience.”

  29. Milwaukee Native says:

    happyjack27, thanks for verifying what I suspected.

    What’s alarming is how a discredited made-up theory just keeps getting used over and over to justify self-serving policies to help the rich get richer.

    Krugman’s column notes the same trend with climate deniers. Even though there should be nothing partisan about protecting the planet and averting climate-related disaster (and “conservatives” have long supported conservation of natural resources) the new GOP has turned climate science into a partisan issue. With the new lock on all branches of power, destructive policies that regard facts can be executed with impunity.

  30. happyjack27 says:

    The RationalWiki article on supply-side economics is pretty funny: http://rationalwiki.org/wiki/Supply_side_economics

  31. BoJack Horsemen says:

    Legalize marijuana on a recreational level and maybe the state would be able to afford to raise the minimum wage slightly. It’s honestly just common sense.

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