The Democrat-controlled state Senate will soon consider a bill to increase Wisconsin's minimum wage in September from $6.50 to $7.25 per hour, as well as index the minimum wage to inflation. Supporters claim the bill would directly benefit about 100,000 workers—mostly adult women.
As part of a two-stage hike, Wisconsin raised its minimum wage to $5.70 per hour in 2005 after languishing at the federal rate of $5.15 since 1997. In 2006, the rate increased to $6.50 per hour.
Wisconsin is now tied for 20th in minimum wage among the 50 states and the District of Colombia, with Washington in first place at $7.93 per hour. If Wisconsin's proposed legislation passes, its minimum wage would tie nationally for eighth place in 2008.
Republicans claim—as they did when Doyle first proposed raising the minimum wage in 2004—that an increase would hurt the state's economy and dry up jobs for workers at the bottom of the wage ladder.
Although this argument fits classic microeconomic theory, the Economic Policy Institute in Washington, D.C. claims that the best recent research on minimum wage shows any negative effect on the labor market is offset by higher wage levels.
If this is true, why shouldn't Wisconsin boost its wage? The answer lies less with economic theory than with politics.
Under the current arrangement, fickle political winds rather than economic logic determine minimum wage rates. Years often go by with no increase, while the value of the minimum wage falls and the lives of millions of the nation's most vulnerable citizens get worse.
In Wisconsin—where a minimum wage increase would be hotly opposed in the Republican-controlled Assembly—Democrats need to use their political capital on the aspect of minimum wage that matters most, wage indexing.
Instead of trying, with little hope of success, to raise the base wage for the third time in three years, Democrats should help minimum wage workers get what they deserve: pay that keeps up with inflation regardless of party politics.
