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Is a $15 minimum wage really beneficial?

Local News

(WFRV) – First on President Biden’s agenda is getting his pandemic relief package passed and it’s his proposed changes to the minimum wage that’s garnering much debate.

Justin Gephart, make minimum wage and says, “I don’t make near $15 an hour. I would love to have that.”

A priority for President Joe Biden is to nearly double the minimum wage to $15 dollar an hour as part of his COVID relief plan.

Gephart would like to make more money but worries the benefits may be short-lived. “I’m all for an increase in the minimum wage but not $15 dollars an hour.”

Employees fear the wage increase may be passed back to workers.

Gephart says, “Companies that are going to have to pay these people are going to have to catch those profits back up somewhere and it’s going to be raising prices whether it be a loaf of bread, a gallon of milk.”

Gephart also worries that some businesses may close their doors for good. “One of my biggest fear is to is your local mom and pop shops that a lot of those guys can’t afford to pay someone $15 an hour. It’s either going to put them out of business.”

Economists say depending on your location, a higer wage could mean a more prosperous life.

Hillary Caruthers, an associate professor of Economics at Lawrence University economist says, “The workers that are retained are going to have a much higher standard of living a much higher quality of life and that those gains will offset the small decreases in employment so overall I think it’s going to be a very positive thing.”

Raising the mimum wage would put more money into the pockets of workers but economists warn it may also tie the hands of employers.

David Gerard, a professor of Economics at Lawrence University says, “From a business perspective you will likely hire fewer workers and of course, you’ll likely think about how you’re going to replace workers.”

Many businesses are struggling during this pandemic however employers in some cities can absorb the minimum wage increase.

Gerard says, “So in the green bay area, the average wage is probably $10 or $11 dollars an hour. If you’re in the new york metro area it’s probably like closer to $14, so if you employ people in New York City, you probably won’t notice the minimum wage but in Green Bay, you’ll probably notice it quite a bit cause you’re paying your employee 30 to 40 percent more.”

Gerard also says, “Economists generally think that the minimum wage is probably not the best instrument we would prefer something more of a regional wage subsidy.”

Caruthers says, “We are long overdue for an increase in minimum wage so economists would typically advocate for pegging the minimum wage to the inflation rate.”

The minimum wage was raised to $7.25 in 2009 and economists tell Local Five that because of inflation, the current minimum wage is actually about 20-percent lower than in 2009.

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