By VANESSA SKILDUM, ELLIE REPINSKI, and IAN ISBELL
The federal minimum wage is set at $7.25 an hour, and although many states have adopted higher minimum wages, Wisconsin currently shares the federal minimum. To account for the higher cost of living and to close wage gaps, Wisconsin should raise the minimum wage to $15.
The federal minimum wage has yet to be raised since July 2009 when it was set to $7.25. According to the Economic Policy Institute, this is the longest period of time that it has gone without a raise since the federal minimum was established in 1938. Recent attempts for its increase have been unsuccessful.
The Obama administration said, “On average, a full-time minimum wage worker makes $14,500 a year, which leaves too many families struggling to make ends meet.” However, their arguments failed to pass any legislation. During his first year in office, President Biden tried and failed to pass a $15 minimum wage act. He only managed to raise the wages of federal contractors by an executive order.
A mathematical theory called a living wage has been created to put the price of living in comparison to the minimum wage. A living wage is a theoretical income that allows an employee to cover the costs of the basic needs of their family. The number accounts for the number of workers and dependents in the family unit. According to the Massachusetts Institute of Technology’s living wage calculator, the estimated living wage for a single adult working full time in Wisconsin with no children is $16.06 an hour or an annual salary of $33,409. A current minimum wage worker makes less than half of this calculated amount.
As the cost of living has increased rapidly since its last raise, both Wisconsin senators, Ron Johnson and Tammy Baldwin, support raising the minimum wage. Johnson described the current $7.25 minimum wage as “historically low,” and agreed that higher payment would help balance the increased cost of living. Baldwin was a main supporter behind the 2021 Raise the Wage Act.
Increasing the minimum wage would also help close the racial, gender and ethnic wage gaps that the state faces. Can’t Survive On $7.25 a new report written by the University of Wisconsin-Madison’s Center on Wisconsin Strategy (COWS) showcases data where a $15 per hour increase would cause nearly one-in-five women. One in four workers who identify as Black or Hispanic would also see their wages increased.
The primary argument against increasing the minimum wage is that it would raise unemployment rates. Businesses would have an increased cost of labor and may downsize their staff to cut labor costs. Many working Americans could experience seasonal employment or even drop out of the workforce entirely.
According to The Effect of Minimum Wages on Low-Wage Jobs, an article published in the Quarterly Economic Journal in 2019, a significant number of people lost their jobs when the first 25 cent minimum wage was set in 1938. This demonstrates that abrupt changes in wage policy can disrupt the workforce.
However, this phenomenon of job loss is shown to be false in other scenarios as well. In the same article, a survey on New Jersey restaurants found that after an increase in the minimum wage had gone into effect, there was “no evidence that the rise in New Jersey’s minimum wage reduced employment at fast-food restaurants in the state.” Additionally, they also found “the overall number of low-wage jobs remained essentially unchanged over the five years following the increase.”
A study done by Wiltshire, Mcpherson and Reich in Are $15 Minimum Wages Too High also supports that raising the minimum wage would not affect employment. The study follows 47 U.S. counties that have reached a minimum wage of $15 and they concluded that the higher minimum wages of $15 in California and New York did not decrease employment, but still increased the earnerings of the workers. In fact, the evidence provided by the study suggested that the new policies “significantly increased employment.”
Currently, a full-time minimum wage job is not enough to pay for someone’s basic necessities. The time for an increase is now, as the prices and cost of living in Wisconsin have long since surpassed the purchasing power of $7.25 per hour. An increase to $15 would close the wage gap and ensure more people make a living wage. To address these concerns, Wisconsin should join the 30 other states and raise its minimum wage above the federal minimum. It is time Wisconsin has a minimum wage of $15.
Featured Image Credit: Working Wisconsin
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