Study: Raising minimum wage could cut 16,000-plus jobs in state restaurant industry
Would also cost taxpayers more than $69m, says restaurant association

By Alison Fox - Freeman Staff

June 19, 2014

WAUKESHA - A study was released by the Wisconsin Restaurant Association Wednesday, indicating that increasing the minimum wage to $10.10 would eliminate 16,500 jobs in Wisconsin while costing taxpayers more than $69 million.

President Barack Obama has proposed raising the minimum wage nationwide to $10.10 per hour and Rep. Cory Mason, D-Racine, has proposed raising the state’s minimum wage to the same level.

“Raising Wisconsin’s minimum wage to $10.10 per hour would benefit 587,000 Wisconsin workers and their families,” Mason said in a statement. “These wages increases will lift workers out of poverty and inject more than $517 million into Wisconsin’s economy. There is board support across the political spectrum for raising the minimum wage and valuing the dignity of work.”

In the study, labor economist David Macpherson of Trinity University used Census Bureau data to estimate the impact on Wisconsin’s labor market and budget if the minimum wage was raised accordingly.

The results suggest that, while many industries would be negatively impacted by the increase, the retail trade, arts, entertainment, recreation, accommodations and food industries would be hit the hardest.

The restaurant industry - particularly tipped workers - would be especially affected, and a bulk of the job losses would be concentrated among people with a high school degree or less, according to the release.

“As our state’s economy begins stabilizing and adding jobs, now is not the time to prevent hiring and squeeze business owners’ already razor-thin bottom lines,” said Ed Lump, CEO of the WRA, in the release. “We should focus on common sense solutions that create jobs and promote opportunities for workers of all experience levels. Across the board wage increases will hurt those who need help the most.”

According to the study, approximately 34,000 state and local employees’ wages would be affected by the $10.10 increase in Wisconsin, which will make for a combined cost to Wisconsin taxpayers of over $69 million annually.