Minimum Wage Increase To $15 Could Cost Jobs: Study Author

May 7, 2019

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We recently talked with proponents about the economic benefits of raising the state's minimum wage to $15 per hour. We've also talked with people who have a different view.

The free-market Badger Institute commissioned a study through Marquette University's economics department which showed if the wage rose to that level, there would be accompanying job losses. “The High Cost of Increasing the Minimum Wage in Wisconsin to $15,” authored by economists and Badger Institute Visiting Fellows Ike Brannon and Andrew Hanson, examines the economic impact in Wisconsin.

Dr. Hanson says because some places already have made the jump to $15 an hour, they had some data to look at. He says if the state moved to the higher wage, about 38 percent of the workforce would be affected...

"..That's 1.1. million workers would be impacted in some way. Some of those workers are going to get an increase in pay and that's the intent of the minimum wage, of course, for people supporting the minimum wage. But what we're also worried about is some of those workers are going to lose their jobs because the cost of employing them is substantially higher in many cases...."

He says about 350,000 workers would lose their jobs. He says that is based on an economic model based on historical estimates of what happens when this type of wage increase happens. Hanson says the model they developed had an immediate wage increase and the impact. 

He was asked what would happen should a higher wage be phased in... 

"Though a phasing-in would result in smaller job losses than the type of estimates we're talking about we still think there still would be job losses..."

The report is available through the Badger Institute.