Milwaukee Fight for $15 minimum wage rally outside McDonald’s in January 2021. (MTEA | CC BY-NC 2.0)
Doubling Wisconsin’s current minimum wage by 2025 would benefit nearly one-third of the state’s workforce without leading to job losses, according to a Wisconsin policy research group.
A minimum wage hike would be especially timely because of the impact that the COVID-19 pandemic has had on low-wage workers, according to COWS, an economic research and policy organization based at the University of Wisconsin-Madison, which has published a fact-sheet online outlining its findings.
“The workers who have carried the brunt of the economic burden are disproportionately people of color and women, working in our lowest wage sectors,” states a COWS summary. “These are the very workers who stand to gain from a higher minimum wage.”
The fact-sheet is based on national research released earlier in March by the Economic Policy Institute (EPI) in Washington, D.C., examining the impact of the Raise the Wage Act — proposed legislation to raise the national minimum wage to $15 by 2025. The federal minimum wage, which is the same as Wisconsin’s state minimum wage, is $7.25.
The federal wage has been fixed at $7.25 since 2009, while inflation has eroded its purchasing power by 18%, according to COWS and EPI.
If the 1968 hourly minimum wage were adjusted for inflation, it would already be at $10.59. But if the hourly minimum had kept pace with productivity growth over the last 50 years, it would now be $22, the researchers state.
The COWS and EPI research found that a minimum wage hike would immediately give a raise to 586,000 Wisconsin workers who are currently paid the minimum wage — 21% of the state’s workforce. Another 9%, or 257,000 workers, would likely see their pay go up with the increase in pay scales close to the new minimum, the researchers conclude. And it would raise the pay for half of the state’s Black workers, more than half of Hispanic workers, and 37% of women workers.
Although a Congressional Budget Office analysis of the Raise the Wage Act forecasts that the legislation would eliminate 1.4 million low-wage jobs, EPI says that the estimate is overstated.
An extensive body of empirical research has found no support for the claim, according to EPI. For example, a survey of 138 state minimum wage increases between 1979 and 2016 found no change in the number of low-wage jobs in the five years after an increase.
COWS notes that while in some states local ordinances have raised the minimum wage in certain cities, Wisconsin state law has blocked local communities from instituting their own wage standards.
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