Empower Wisconsin | Feb. 13, 2020
By M.D. Kittle
MADISON — In their eternal quest to spend somebody else’s money, liberal lawmakers are rolling out another bill that would raise Wisconsin’s minimum wage to $15 an hour.
Led by Madison Dem Reps. Melissa Sargent and Lisa Subeck, the legislation increases the minimum hourly wage over a five-year period. But they don’t stop there. Upon hitting a mandatory $15 an hour, the minimum wage would have be be annually indexed to the rate of inflation. The bill also repeals a provision in state law that prohibits local governments from enacting their own minimum wage laws.
The liberals contend their bill will address “the systematic injustice of unfair compensation, by creating a liveable wage for workers in Wisconsin.” But, like a lot of liberal ideas, the legislation disregards the unintended consequences that would hurt the same people they’re trying to help.
Forget the fact that relatively few working adults make the federal minimum wage of $7.25 per hour. In fact, minimum wage work has been declining for several years thanks to a booming economy and a tight labor force.
In 2017, the most recent data available, just 2.3 percent of all hourly paid workers earned minimum wage. In Wisconsin, the percentage of hourly workers earning minimum wage or lower was 2.7 percent, according to the U.S. Bureau of Labor Statistics. And the brunt of those workers are teens and young adults beginning their working lives in entry level positions.
Even basic-skills positions are paying significantly higher wages, as companies compete for employees. Cashiers at convenience stores like Kwik Trip, for instance, are starting at $12 an hour and more.
When governments get involved in jacking up the minimum wage, businesses, consumers and the economy pay.
Take New York City. Businesses there have been struggling since the liberal city government set a $15 minimum wage in 2018.
Thomas Grech, president of the Queens Chamber of Commerce, reported an uptick in small-business closures in the first year of the $15 minimum wage.
“They’re cutting their staff. They’re cutting their hours. They’re shutting down,” Grech said.
The American Enterprise Institute reported in August that nearly 80 percent of New York City restaurants had slashed employee hours. Thirty-six percent said they had to layoff employees and 90 percent had to increase prices following the minimum wage hike, according to a NYC Hospitality Alliance Survey taken just one month after the wage went into effect.
Similar stories are playing out in other U.S. cities.
While liberals argue substantially hiking the minimum wage will lift thousands out of poverty, they ignore the unintended consequences of the government-mandated increase.
A study by the Congressional Budget Office tracked the potential impacts of the federal government raising the minimum wage to as high as $15 an hour by 2025. While the CBO found increasing the rate would boost earnings for many, other low-wage workers would become jobless, and their family income could send them below the poverty line.
“The idea of raising the minimum wage is noble and commendable, but many of the arguments rely upon raw emotion and neglect sound economic ramifications that will adversely impact the same people it’s trying to help,” wrote Forbes senior contributor Jack Kelly last year in a piece that tracked the unintended consequences of raising the minimum wage to $15 an hour.