New State-Level Study Confirms Negative Impact of Minimum Wage Hike

Wisconsin Would Lose More Than 27,000 Jobs

MacIver News Service | March 5, 2014

by Haley Sinklair

[Madison, Wisc…] An updated report from economists at Miami and Trinity University shows an increase in the minimum wage would raise unemployment for the least skilled. The study also refuted the argument that a wage hike would reduce poverty.

According to the analysis, Wisconsin could stand to lose 27,659 jobs.

“Across all 50 states, the updated analysis shows that at least 360,000–and as many as 1,084,000 jobs–would be lost,” the report reads.

The study provides state-level estimates using updated Census Bureau data from 2012 and 2013 on the amount of jobs that would be lost due to a wage hike to $10.10 an hour.

The information released in the report is similar to data published by the non-partisan Congressional Budget Office just last month, which said a minimum wage increase would likely eliminate 500,000 jobs and possibly up to one million.

The academic study also shows a wage hike would do little to reduce poverty. It highlights a previous report from Cornell and American University that found no reduction in poverty rates from the last federal minimum wage increase to $7.25.

Approximately 60 percent of the working-age poor do not have a job and are thereby unaffected by a wage increase, as well. The report also states many other poor individuals already make more than the proposed minimum wage, but are poor due to other reasons such as low work hours.

This new study confirms the negative impact of the minimum wage found in a report previously published by the MacIver Institute, which said more than 7,000 fewer teens are working today because of minimum wage increases.