Wisconsin Senate Votes to Index Minimum Wage

They passed it today. 

The state Senate has passed a bill that would raise Wisconsin’s minimum wage.

The measure, written by Democrats, would boost the wage from $6.50 to $7.25 an hour. Then it would increase annually based on inflation.

Democrats say the increase will help poor people. Republicans say it will hurt businesses.

The Senate voted 19-13 to pass the measure Tuesday. It goes next to the Republican-controlled Assembly.

Two Republican Senators voted for the bill, Mike Ellis and Dan Kapanke.  Be sure to send them your thanks. 

1. Have there been any studies done that indicate that minimum wage increases actually hurts jobs?  Common sense would tell me that it would.  I would think that will be job consolidation among some small business and decreased raises for people making over minimum wage to pay the increase.

   Posted by on January 15, 2008 at 1828 hrs




2. I’ll definitely have to send those two Republican Senators my thanks, because a minimum wage increase is long overdue.

   Posted by Zach W. on January 15, 2008 at 2036 hrs




3. Cross your fingers. Hopefully the assembly stands tough like real Republicans should.

   Posted by on January 15, 2008 at 2112 hrs




4. Overdue???  Wisconsin raised the minimum wage just last year!  It is scheduled to go up again next summer!  The federal government also passed an increase.  I don’t remember the exact details of the law but I think the main affect of this bill is the inflation indexing.  How ridiculous!

   Posted by on January 15, 2008 at 2136 hrs




5. Minimum wage jobs are low paying because they’re entry level positions with room for advancement.

   A vast majority of the people working in minimum wage jobs are teens.  Only in very rare circumstances are the persons working minimum wage jobs the “breadwinner” of anything resembling a family.  People act as if everyone works in minimum wage jobs.  They don’t.  And when they do, they don’t stay there very long. 

   All a markup does is punish employees and those who *do* work those jobs.

   An employer has to keep his bottom line.  If that means having to choose between paying 5 people a $6.50/hour or 4 people at $7.25/hour, he’s going to go with the latter.

   I don’t know about you, but I’d rather be making $6.50 than unemployed because of unnecessary minimum wage hikes.

   Posted by Amy P. on January 15, 2008 at 2237 hrs




6. Ok, what total BS, which one of you poseurs wants to try and live on 15K a year?

   Owen?

   Posted by on January 15, 2008 at 2239 hrs




7. Enough conjecture. Here is my facts that despite so called “common sense”, a minimum wage increase does not drive away jobs. Toss yours down:

   A 1998 Economic Policy Institute study failed to find any systematic, significant job loss associated with the 1996-97 minimum wage increase. In fact, following the most recent increase in the minimum wage in 1996-97, the low-wage labor market performed better than it had in decades (e.g., lower unemployment rates, increased average hourly wages, increased family income, decreased poverty rates).

   Studies of the 1990-91 federal minimum wage increase, as well as studies by David Card and Alan Krueger of several state minimum wage increases, also found no measurable negative impact on employment.

   New economic models that look specifically at low-wage labor markets help explain why there is little evidence of job loss associated with minimum wage increases. These models recognize that employers may be able to absorb some of the costs of a wage increase through higher productivity, lower recruiting and training costs, decreased absenteeism, and increased worker morale.

   A recent Fiscal Policy Institute (FPI) study of state minimum wages found no evidence of negative employment effects on small businesses.

   Here’s common sense. We have a consumer based economy. Therefore it needs consumers.

   Posted by on January 15, 2008 at 2251 hrs




8. Minimum wage laws typically do increase unemployment, however the economic literature is inconclusive as to how damaging it actually is.  The determining factor is probably the difference between the free market wage and the legislated wage.  After all, legislating that everyone would make $1,000,000 would destroy the economy, while legislating a 1 penny increase would do nothing.

   However, regardless of the practical consequences, if you support the minimum wage you support taking money from really poor people to give it to slightly richer people.

   Which makes you at least a little evil, I would say.

   Posted by PaulNoonan on January 15, 2008 at 2252 hrs




9. if you support the minimum wage you support taking money from really poor people to give it to slightly richer people.

   Come on Paul that is BS and I know you are smart enough to know that.

   Which theory of value would you like to start with?

   And in what market setting?

   Posted by on January 15, 2008 at 2303 hrs




10. The only thing it does is cause inflation. It always has the support of unions because the increase ripples up through the wage scale. Basically, the economy adjusts to the new numbers, prices increase, etc. and nothing has been accomplished, thereby requiring the need for liberals to call for another raise...and round and round it goes.

    They know it’s never going to get through the Assembly...the only reason it was brought to a vote was for campaign fodder against vulnerable Republicans Senators like Kapanke. Who knows about Ellis...could be some sort of an innoculation against the Valley Disease that sent Kagen to Washington.

    Posted by on January 15, 2008 at 2350 hrs




11. The only thing it does is cause inflation.

    #1—it has been maintained by many against the minimum wage that few get it, so why would it be a factor if you believe that?

    #2—bet you that the aggregate of the increase would be on par with a couple of hedge fund salaries.

    About two million people earn minimum wage. That increases comes to about $1.5 billion. Hmmm, in a $15 trillion economy I think we can afford that.

    Why does this economy have to be carried on the backs off the poor and middle class?

    Posted by on January 16, 2008 at 0628 hrs




12. My mistake. We’re talking about Wisconsin, not the US. The impact would be even smaller.

    A chance to make another point.

    If you want to be in business, a prerequisite is you have to pay people a living wage as a presumed cost of doing business, or you have no right to be in business.

    Posted by on January 16, 2008 at 0631 hrs




13. If you want to be in business, a prerequisite is you have to pay people a living wage as a presumed cost of doing business, or you have no right to be in business.

    That may be the most idiotic thing I’ve ever read.  Ever!

    You have no obligation to pay anybody… ANYTHING.  Let alone what some goofy politician decides is a “living wage”. 

    You DO have to pay someone for the value of their work.  If you want to bring in someone with years of experience in your industry… that is going to cost you money.  If you think the job requires little skill and you can pay someone a minimal amount to do it, then you get to make that choice.  It’s up to you, the business owner, to decide which jobs are which. 

    Seriously, that quote just blew my mind.  That someone that grew up in the same country that I did can really think that way is beyond my comprehension.

    Posted by Deibert on January 16, 2008 at 0903 hrs




14. "If you want to be in business, a prerequisite is you have to pay people a living wage as a presumed cost of doing business, or you have no right to be in business.”

    What’s a living wage for a student?
    What’s a living wage for a scientist?
    What’s a living wage for an “evil” hedge fund manager?

    “All animals are equal. but some animals are more equal than others”
    G.O.

    Posted by on January 16, 2008 at 1005 hrs




15. Ok, I’m going to email the two “esteemed” reps and let them know of my disappointment, on their selective representation.  I make more than the minimum wage, but that shouldn’t exclude me from having the salary indexed with inflation as well.  If the government is going to control the free market, then they need to do it 100%, and not half assed.

    Posted by on January 16, 2008 at 1032 hrs




16. Guess it all comes down to power, not the so-called unseen hand of the market. To borrow from Seinfeld, there are a few people with a lot of hand.

    Right now the power is in the hands of the employer, especially in depressed regions. Of course the reason why the region is depressed because of the failure of wages to rise, and the failure to realize that a job should rise you out of poverty, not put you in it.

    So then the power comes down to political, and for the most part getting people attuned to the morality and common sense economics of stipulating a minimum wage. Power is power, whether it comes from taking advantage of the market or government mandates.

    Posted by on January 16, 2008 at 1036 hrs




17. PJR, the minimum wage increases the cost of labor, which creates an incentive for employers to replace labor with capital.  This does increase unemployment among the most unskilled workers, who do tend to be the poorest.  Those that benefit from the minimum wage are those that were makign an amount between the old minimum (or 0 if there was no old minimum) and the new minimum.  Minimum wage laws, therefore, destroy jobs for the poorest people will the poorest skill sets, to give more money to those slightly above them.

    This is consistent in any market setting.  You may argue that this tradeoff is worth is in some isntances, as some prominent economists have, but the fundamentals that I have described are true, and must be dealt with to have an actual conversation on the subject.

    Posted by PaulNoonan on January 16, 2008 at 1053 hrs




18. Wait, I’m confused.  Isn’t our economy still destroyed from the 2005 minimum wage increase?

    Posted by on January 16, 2008 at 1105 hrs




19. pjr wrote: Ok, what total BS, which one of you poseurs wants to try and live on 15K a year?

    I have.  Years ago in my minimum wage days I lived on what would be, even in today’s dollars, much than $15k year.

    I didn’t like making only minimum wage.  And I didn’t like that it was so low.  It sucked.  But instead of bitching about it and complaining about how “unfair” life was, I worked harder than the dipshits and hacks around me so I could get more money and move on to better positions.

    What is so wrong about expecting others to do the same thing?

    Posted by David on January 16, 2008 at 1134 hrs




20. Unions support minimum wage increases, why? Union members make many times minimum wage. Actually their wage is often pegged to some multiple of minimum wage, so a teamster making 3xminimum wage just got a $2.25/hour raise or an additional $4,500/year. Now multiply that by however many teamsters are working at a given factory and wonder how much a minimum wage increase screws over the business owner? Of course the business can’t fire even one teamster or they all strike and shut down the factory completely. (hence why minimum wage increases don’t cost jobs...) So now the extra cost is passed on to the consumer, prices go up for everyone, and people who didn’t get a government mandated raise basically got a salary reduction.

    Posted by Matt on January 16, 2008 at 1150 hrs




21. Of course the reason why the region is depressed because of the failure of wages to rise, and the failure to realize that a job should rise you out of poverty, not put you in it.

    Keith, come on.  That is the second dumbest thing I’ve seen posted here today.  But hey, the good news is that the first was posted by ...  oh, er, nevermind, it was by you as well.  Sorry, thanks for playing.  Go get in line to get your government handout.

    Posted by on January 16, 2008 at 1150 hrs




22. This country is doing all it can to shred what little vestige of a safety net we have. Maybe the minimum wage does some punishing on small businesses, but what it does do is create pressure on other low wage national companies to push it up.

    Europeans countries provide a backstop for its citizens with no negative impact on their economies, which by the way are kicking our behinds.

    Yeah, you’d expect some job loss but that is probably not the case. Some times you have to be a little counter-intuitive to make things work and not all trussed up with ideology. Trickle down over the past 30 years has been a failure.

    Posted by on January 16, 2008 at 1614 hrs




23. Europeans countries provide a backstop for its citizens with no negative impact on their economies, which by the way are kicking our behinds.

    Two completely false statements.  Wow.

    Trickle down over the past 30 years has been a failure.

    Again, not true.

    Posted by on January 16, 2008 at 1620 hrs




24. Kaith:

    Could the region be depressed by...oh say...high taxes?

    Exerpt from “How Wisconsin became a Hiugh-Tax State,
    what it will take to change it, and why, if we don’t,
    you won’t be able to afford to live here.”

    by Mary Van de Kamphnohl

    “Wisconsin has never gotten out of the top 10 hottest tax hells, according to the Tax Foundation. Since 1993, we have been stuck in second or third place in its rankings (fourth in some years, according to the Taxpayers Alliance).

    When you compare states, you have to look at both local and state taxes because the two are so intertwined. In Wisconsin, for example, more than 60 percent of the state budget goes to ease local property taxes. According to the Tax Foundation, Wisconsin residents paid 12 percent of their income in state and local taxes in 2002, down slightly
    from what they paid a year earlier because of
    adjustments in the income tax rates and the slowing economy (this is an estimate; final numbers aren’t available until 2004). That 12 percent translates into $120 per
    $1,000 of income. Only the residents of Maine (12.8 percent) and New York (12.3 percent) paid more.Wisconsinites paid 17.6 percent more than the national average. This means Wisconsin residents worked 121 days last year to pay all of their local, state and federal taxes; 43 days just to pay state and local taxes. In comparison, they worked 106 days for all of their food, clothing and shelter combined. When you include federal taxes, 33.7 percent of Wisconsinites’ personal
    income went to taxes last year.”

    And this is all before Diamond Jim’s latest round of increases.

    Posted by on January 16, 2008 at 1632 hrs




25. Europeans countries provide a backstop for its citizens with no negative impact on their economies, which by the way are kicking our behinds.

    European growth over the last 3 decades is about half od American growth over that period, while they’re unemployment is typically about double. 

    Europe’s economy is currently growing too slowly to sustain their welfare state for much longer, especially given that almost every major producer in Europe (Germany, France, GB) is losing population.

    Posted by PaulNoonan on January 16, 2008 at 1639 hrs




26. Why reinvent the wheel when someone else puts it so well:

    In my experience as having worked on both sides of the Atlantic for 7+ years, my appreciations are that in the US, an individual needs to put away a bigger chunk of his/her paycheck for items covered by European taxes.

    Thus, in the end, US worker gets taxed higher than its European counterpart.

    Add the costs of healthcare for all your family members. Add the cost of mandatory pension funds (retirement payment by US government is a joke). And add the cost of donations (charity organizations in US must cover for services covered by European government programs), the cost of money for coworker with “long-term sickness”…

    This strangles middle-class, kills low-class and only benefits high-class.

    This is awful, but, as 40% of US believe they are in top 10% of the economic ladder, this goes on unchallenged.

    If we look at what contributes to our performance as an economy it gets worse. In this country, we rely too much on foreign investment and in working our people too long and too hard.

    Posted by on January 17, 2008 at 0654 hrs




27. in the US, an individual needs to put away a bigger chunk of his/her paycheck for items covered by European taxes.

    Keith, I guess your argument comes down to what a person expects to have provided for him, and what he should be capable of providing for himself. Health care used to be a financial transaction between you and your doctor; retirement was something you saved for your whole life (maybe even relied on your children for a little help). Now, people look to someone else to write the check.

    So what is it that you feel people should use their wages to provide for themselves? Food? Shelter? Clothing? For some, even that’s too much to expect. Or, is your goal to have the government provide for all basic needs so that wages are free to use for recreation and entertainment?

    Sorry, life doesn’t work that way...the more “help” and security the master provides, them more enslaved the servant becomes.

    Posted by on January 17, 2008 at 1116 hrs




28. I guess the question is how is your ownership society working out for you. Very well I hope in your case, but many of the rest of us (that does not include me) not very well. We have crumbling infrastructure; a lot of our assets being bought up by Arabs, Japanese, etc.; lagging research investment and stagnant middle class growth.

    The European societies which have moved out of the world of Dickens since World War II—thanks to the Marshall Plan—and a reasonable distribution of wealth seem to have it working better for them. Witness their far superior internet in Scandinavia and other places. Try buying a meal over there using a dollar (or in Canada).

    Sure they might be slowing down a bit (which figures don’t show), but their economy is being bolstered by real productivity, not selling off large chucks to overseas investors or writing bogus subprime mortgages to the extent we have been just to keep people spending.

    Posted by on January 17, 2008 at 1353 hrs




29. but many of the rest of us (that does not include me) not very well

    I believe you are suffering from Liberal Guilt Syndrome...I’m OK, but the media tell me about how poorly everyone else is doing. Note that this only occurs when a Republican is in the White House...otherwise, it’s the “best economy in 50 years!”

    Several points:

    R&D;is lagging because the tax structure punishes success - look at pharmaceuticals where liberals decry cost recovery. First pill costs $400 million due to R&D;, subsequent pills cost $2.00 - liberals think the company should supply at cost immediately after a successful drug is developed.

    The traditional middle class is shrinking because many have moved up, not down. Liberals have to continuously move up the definition of “poverty” to keep the same number of constituents below the line.

    Did the Marshall Plan encourage the people of Europe to sit around and wait for the government to do things for them...or to get off their asses and rebuild their countries.

    Do you think the “superior” internet in Scandinavia has anything to do with the drastically shorter distances and more clustered population centers? It’s called economy of scale. I bet the US has equally good speed...in certain areas.

    The weak dollar you cite as a problem will actually help reverse some of the flow of money out of our country. It makes our goods and services more affordable to the rest of the world and they will start to come here. It’s called the free market. The basic point is that a job is worth what it’s worth, relative to everything else, and the “buying power” of the minimum wage can’t be artificially set by government unless they freeze all other wages and the cost of goods.

    Posted by on January 17, 2008 at 1536 hrs




30. John Keneth Galbraith believed that the government should set all wages and all prices for basics.  He said that Nixon was right with wage and price controls, he just did not do it the right way.
    The Soviet bloc did it the right way and see how prosperous they are?  Go to Cuba, it is a workers’s dream.
    John Savage just got back from observing their Camelot.  Schmitz should go. They get their healthcare two aspirin at a time.

    Posted by on January 17, 2008 at 1712 hrs




31. Bob, I try to stick to the argument. Try it sometime. It’s fun.

    Point by point wiggie.

    R&D;-- a combination of government cut backs and corporate profit taking. Despite the former, the government subsidizes 50% of pharmaceutical research. Yeah we deserve a cut because we all have helped pay for it. The sheeple on the right however don’t have this logic.

    Middle class moving up—the opposite is true. This is 2007, not 1957.

    Marshall Plan—back then the fears were fact that post-WWII would have replicated post WWI. You know, conditions being ripe for fascism. The right wing maybe didn’t think about that part, or they would have REALLY been against it. Nevertheless the plan would have realized their worst fears that government support works. Fortunately LBJ helped Ike fight for it. Well, their worst fears were realized and Europeans for the most part don’t have to worry much about being thrown into dire personal consequences. What a shame.

    As for Scandinavia, they regulate their telcoms so they can protect these companies against their excesses, plus there is a private/public parntership going on. But what fun is that.

    As far as the dollar, everyone in the world knows about our deficits and the ineptitude of the Bush administration. You know the Chinese, those people who are in some ways supposed to be our enemies, at least when Clinton deals with them, own big chuncks of us. At least Bush now has his ownership society—our society is owned by the house of Saud, the Japanese and maybe coming soon, Russian oil barons. The part you like is when the Canadians start cashing in on oil shale they’ll break off pieces of us to.

    Posted by on January 17, 2008 at 1842 hrs




32. Capitalism is a tough world isn’t it.  The opposite is worse.
    We should not have let the dollar fall. We have enough coal and oil shale to last us a thousand years.
    If Canada gives us a problem with oil and shale we can bring back Dick Cheney and invade them.

    Posted by on January 17, 2008 at 1933 hrs




33. Bob, you are a binary guy living in a analog world.

    Posted by on January 17, 2008 at 1937 hrs