MacIver News Service | Oct. 26, 2018
By M.D. Kittle
MADISON – Tony Evers played to his liberal base at a campaign stop earlier this week in Milwaukee, telling supporters that if he is elected governor, Wisconsin would go to a “$15 an hour minimum (wage). Minimum.”
That’s the kind of rhetoric that riles up progressives on the campaign trail, but it’s the kind of policy that can decimate economies – and hurt the very people it’s trying to help.
As MacIver News Service chronicled, Evers, Wisconsin’s superintendent of the Department of Public Instruction and the Democrat’s candidate for governor, on Monday, appeared alongside the godfather of the $15 minimum wage, U.S. Sen. Bernie Sanders (I-Vt.). Sanders was stumping on behalf of his fellow big-government friends, Evers, U.S. Sen. Tammy Baldwin (D-Madison), U.S. Rep. Gwen Moore (D-Milwaukee), Mandela Barnes, Democratic candidate for lieutenant governor, and 1st Congressional District candidate, Randy “the Iron Stache” Bryce.
Each is a proud member or the $15 minimum-or-bust gang, a push by progressive socialists to establish what they consider to be a “living wage.”
As a growing body of research shows, the forced $15 is coming with some deleterious consequences, and it could be just the beginning.
A new study from the University of Washington found Seattle’s path to a $15 minimum wage to date appears to have caused employers in the Emerald City to trim low-wage worker hours by 9 percent on average. They earned $125 less each month following the most recent increase, according to the study, funded in part by the city of Seattle.
“If you’re a low-skilled worker with one of those jobs, $125 a month is a sizable amount of money,” Mark Long, a University of Washington public policy professor and co-author of the study told the Seattle Times. “It can be the difference between being able to pay your rent and not being able to pay your rent.”
The report looked at the wage, employment, and hours following the first and second phase-in of the Seattle Minimum Wage Ordinance, which raised the minimum wage from $9.47 to $11 per hour in 2015 and to $13 an hour in 2016.
In January, Seattle’s minimum wage rose to $15.45 for workers at McDonald’s, Target and other large companies or chains with more than 500 employees globally, and who do not receive health care benefits from their employers, according to the far left advocacy group Working Washington. The minimum wage climbed to $14 an hour for employees of smaller companies.
The latest study, unlike others that have found no or minimal impact, takes a broader look at the effects a rising minimum wage has on employment and earnings in wide-ranging, low-wage industries.
“It reaches a markedly different conclusion: employment losses associated with Seattle’s mandated wage increases are in fact large enough to have resulted in net reductions in payroll expenses – and total employee earnings – in the low-wage job market,” the full report states.
Elsewhere, a study by the Employment Policies Institute takes a longer-term look at California’s minimum wage increases. The state, now on the road to a $15 minimum wage, has since the late 1990s mandated higher minimum wages than the federal floor. The EPI report, released earlier this year, found that a 10 percent increase in the minimum wages results in a nearly 5 percent reduction in employment in low-wage industries.
But a $15 minimum is, well, just the minimum. When Tony Evers and fellow progressives say, “$15 an hour minimum. Minimum,” take them at their word. And the word is “Living Wage.”
Earlier this year, state Rep. Chris Taylor (R-Madison) unveiled proposed amendments to the state constitution. Among the proposals is a living wage that could push the minimum wage in places like Madison or Milwaukee to over $25 an hour, based on an MIT study.
As Taylor puts it, “Every person has the right to a just and fair wage that ensures for the person and the person’s family an existence worth of human dignity and a sufficient standard of living.”
That sounds like justice. It’s a recipe for disaster.
A 2014 MacIver Institute Study found 91,000 Wisconsinites would lose their jobs if the minimum wage was raised to $15. Considering that many of those are entry level jobs, a “living wage” mandate would close countless opportunities to young workers just getting started in their careers.
The minimum wage, for the vast majority of low-wage earners, is a starting point, not a wage destination.
Nationally, 542,000 workers, or 0.7 percent of the work force, were making the minimum, according to the latest data from the U.S. Bureau of Labor Statistics. More than 170,000 of those earners were teenagers. Out of 1.9 million hourly workers in Wisconsin, 17,000 make minimum wage.
In a booming economy where the biggest concern is worker shortages, convenience stores and fast-food restaurants are paying well above the minimum wage. Not because they are forced to, but because they have to. That’s the power of the free market. That’s the force that makes the minimum wage a starting point, not an ending point.
But government force won’t create upward mobility. As we’ve seen, “living wage” regulations and ever-escalating minimum wages cost jobs and earnings, and drive businesses out of business.