It’s hard to argue against a rise in the federal minimum wage.
The rate — $7.25 an hour — has not seen a bump in more than a decade and its purchasing power has slipped 17 percent since it reached that level, according to Yahoo Finance.
What is a more prudent bone of contention, however, is to what level the minimum wage should be raised. Recently, the Congressional Budget Office released a report that measured the impact of raising the minimum wage to $15, $12 and $10 per hour by 2025. It found that a rise to $15 would increase the pay for 27 million workers.
Although the new wage also would cause a median 1.3 million employees to lose their jobs, the CBO admitted “there is considerable uncertainty about the size of any option’s effect on employment.”
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The CBO is far from the only group weighing in on the issue. The left-leaning Economic Policy Institute, a nonprofit, Washington, D.C.-based think tank, has estimated a boost to $15 would lift pay for around 40 million workers. CBO’s report shows that as many as 3.7 million workers could lose their jobs if the wage was $15, but EPI said the move would still be a net positive.
“More and more, economists are recognizing that simple, dated models of the economy that always predict job loss when the minimum wage is increased are based on assumptions that have little bearing on the low-wage labor market,” EPI said in a statement in the Yahoo Finance story.
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PayScale, an online provider of compensation data, estimates the average hourly wage in Eau Claire at $16.47. If the minimum wage is pushed to nearly that amount, it’s hard to see how that wouldn’t have a detrimental effect on some local employers.
However, it’s also important to note that we in Wisconsin lag many of our neighbors in this area. Twenty-nine states and the District of Columbia have minimum wages higher than the national rate. They include: Minnesota ($9.65), Illinois ($8.25) and Michigan ($9.25). And polling often finds that a majority of registered voters would like to see some kind of hike in the federal minimum wage.
Is $15 an hour too lofty a goal? Maybe.
But even in a market like Eau Claire, where PayScale says the cost of living is 4.6 percent below the national average, $7.25 is too low.
— Liam Marlaire, assistant editor