Days after Gov. Jim Doyle announced an initiative to raise the minimum wage in Wisconsin, the UW-Madison-based Center on Wisconsin Strategy released a report Monday showing that increasing the minimum wage to $6.80 an hour would help more than 130,000 Wisconsin workers.
COWS Director Joel Rogers, who co-authored the report, said the group did not release the report in conjunction with Doyle's announcement. They picked the $6.80 figure because state Sen. Dave Hansen, D-Green Bay, sponsored a bill to increase the wage by that much in 2001, Rogers said.
\We're interested as an institution more toward the point where workers get decent wages ... but we're not picking a particular number,"" Rogers said.
The report counters two arguments made by opponents of raising the minimum wage: that increases would only benefit teenagers and other young workers who do not really need raises, and that raises would make low income workers too expensive for companies to retain.
According to the COWS report, 57.6 percent of those who would benefit from the increase are adults. Almost one-third of the workers who would benefit directly from the increase work 35 or more hours per week.
The report also states there is no evidence of declining growth after the last minimum wage increases in Wisconsin in 1996-'97.
""We used to think there were heavy negative employment effects that offset the positive wage effects, but research shows that we were just wrong,"" Laura Dresser, a co-author of the study, said in a statement.
However, Robert Haveman, a professor emeritus of economics at UW-Madison, said one must weigh all the costs and benefits of a wage increase when considering whether it is a good idea.
While an increase would not cause job cuts as large as economists used to think, Haveman said an increase to $6.80 would cause about a 10 percent reduction in the demand for low-wage workers, resulting in layoffs.
""An increase in the minimum wage is certainly justified. However, I would hesitate to go all the way up to $6.80 an hour,"" Haveman said.
If the wage were only raised to $6.00 an hour, the amount of job loss for low-wage workers would sit more around 4 to 5 percent, he said.
