Tying Wisconsin's Minimum Wage to Inflation Will Jeopardize Low-Skilled Jobs

The misguided indexing legislation is being considered before the WI Senate
today

WASHINGTON, Jan. 15 /PRNewswire-USNewswire/ -- The Wisconsin Senate will begin
debate today on SB 130, legislation sponsored by Senate Majority Leader Russ
Decker, which would increase the minimum wage to $7.25 and index it to
inflation.

Automatically increasing the minimum wage at the rate of inflation prevents
lawmakers from making future adjustments in the entry-level wage in response
to changes in the state's economic climate.

Already, two-thirds of minimum wage earners receive a raise within their first
year of employment. However, there are some people who lack the skills
necessary to advance in the workplace. It is this vulnerable subsection of
employees that will be the first to lose their jobs when the mandated wage
exceeds their productivity level.

A recent University of California at Irvine study found that high school
dropouts and African-American teens suffer four times more employment loss
from minimum wage increases than their more educated counterparts. For these
vulnerable individuals, a 10 percent increase in the minimum wage leads to an
8 percent decrease in employment.

"Indexing minimum wages does little more than put a cycle of rising labor
costs on auto-pilot; the result will be reduced job growth and annually
increasing harm to the job opportunities for the least skilled, all without
any measurable reduction in poverty," said Jill Jenkins, senior economist at
the Employment Policies Institute. "In the current economic climate marked by
shrinking consumer demand and sales, automatically increasing labor costs
creates the recipe for job loss among the least employable workers."

The Employment Policies Institute is a nonprofit research organization
dedicated to studying public policy issues surrounding entry-level employment.
For additional information or to schedule an interview with a spokesperson
call Tim Miller at 202.463.7650.

SOURCE Employment Policies Institute

Tim Miller of the Employment Policies Institute, +1-202-463-7650