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Kenosha News editorial: Unintended consequences of raising the minimum wage
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Kenosha News editorial: Unintended consequences of raising the minimum wage

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As Washington again discusses increasing the federal minimum wage to $15, groups are continuing to weigh if this is good or bad. One of the most interesting reports came from the Congressional Budget Office, which stated that raising the federal minimum wage to $15 by 2025 would raise 900,000 out of poverty while decreasing employment by 1.4 million.

That doesn’t seem worth the number of jobs lost. In addition, costs for goods will go up when wages go up, making that 900,000 figure a bit questionable. You cannot keep charging $10 for a pizza if you have to pay employees an extra $5 an hour to make it. The cost has to come from somewhere.

In places like California, businesses may be able to handle paying employees $15 per hour (the current minimum wage there is $13 to $14, depending on a business’ number of employees). The cost of living there is sky high compared to the Midwest. And if California or another state wants to raise the minimum wage, that is their decision — and it should be a state decision.

The hope is that people will be able to progress up to $15 through job experience. But to move up, people need experience. They need to work entry-level jobs to learn about work ethic, job demands and meeting a schedule. Many entry-level jobs are perfect for high schoolers and college kids. But if the minimum wage goes up to $15, there are not going to be as many entry-level jobs.

According to the Bureau of Labor Statistics, in 2019 nearly 59 percent of workers earning the minimum wage were between the ages of 16 and 24. Many of them are going to get cut if employers are forced to raise wages to $15.

And what happens to those people currently making $15 or $16 now? They worked up to those wages. It almost disincentives people if everyone is making that amount. It’s not as though employers are going to be able to give them a raise. Those employers are already going to be stretched thin with the minimum wage increase. On top of that, the $15 those people were making will not be worth as much when costs for goods increase.

Also, U.S. Rep. Bryan Steil recently expressed concerns about how a federal minimum wage increase would affect people with disabilities if they are required to be paid $15.

Currently under Section14c of the Fair Labor Standards Act certain groups of people — such as college interns and adults with disabilities — are able to be paid a subminimum wage. That helps incentivize businesses to hire individuals with disabilities to give them experience in the workforce.

An estimated 420,000 people nationwide and nearly 5,000 people in Wisconsin have employment through Section 14c.

Joe Greene, executive director of Racine’s Careers Industries, said, “There’s dignity in work. If we were to take away this special minimum wage law, we’re talking about multiple thousands of individuals with significant disabilities who are now unable to work.”

Greene said “in my perfect world I’d pay everybody $15-plus,” but he doesn’t see that as a possibility in this imperfect world.

While it sounds good to raise the minimum wage to $15 for everyone, there are unintended consequences.

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