Report: Minimum Wage Hike Could Cost Wisconsin at Least 350,000 Jobs

The authors estimate that 50 percent of all affected workers in food preparation and service would lose their jobs.

Increasing the minimum wage to $15 per hour could cost Wisconsin at least 350,000 jobs, according to a new report published by the conservative think tank, the Badger Institute.

According to the analysis, "a high proportion of the state's workers—fully 38 percent—earn less than $15 an hour. Our modeling suggests that almost one-third of this group would be at risk of losing their jobs were Wisconsin to quickly increase the minimum wage – which amounts to 350,000 workers."

Increasing the minimum wage to $15 an hour is "tantamount to an hourly pay increase of 107 percent for workers currently earning the minimum wage," which is unsustainable for employers, the analysis argues.

Half of all job losses would come from the bottom ten percent of the income distribution, and 90 percent would come from the bottom quartile of the income distribution, the report states. The authors estimate that 50 percent of all affected workers in food preparation and service would lose their jobs.

Other major job losses would occur in building and grounds cleaning and maintenance, personal care and service, sales, office and administrative support, production occupations and transportation and material-moving industries.

Supporters of a minimum wage hike say it would lift the salaries of hundreds of thousands of Wisconsin workers

"This move would give a raise to 464,000 workers in Wisconsin, or about one out of every six workers," the Budget Project's Tamarine Cornelius said.

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In New York City, raising the minimum wage to $15 an hour directly led to loss of jobs in the restaurant industry, according to an online survey conducted by the New York City Hospitality Alliance, an association representing restaurants in the city. Restaurants are eliminating jobs, reducing employee hours and raising prices because of the higher costs imposed by the $15-per-hour minimum wage, they claim.

The data suggest that 89 percent of workers in food preparation and service in Wisconsin earn at or less than $15 an hour, which amounts to 217,765 workers, the report states, estimating that half would likely see their jobs eliminated.

Other industries with five-figure job losses include building and grounds cleaning and maintenance, personal care and service, sales, office and administrative support, production, transportation and material moving, according to the report.

Democratic Gov. Tony Evers' budget calls for increasing the minimum wage slowly over the next few years.

Wisconsin's minimum wage has stood at $7.25 an hour since 2009. The governor's budget would increase it to $8.25 an hour on Jan. 1, 2020, and to $9 in 2021. It would increase 75 cents per year in each of the next two years. Then it would grow annually at the rate of inflation.