New report says minimum wage increase could cost thousands of jobs

Eau Claire, WI (WEAU) -- A new report shows an increase in Wisconsin’s minimum wage could cost the state more than 10,000 jobs.

The study from the Wisconsin Restaurant Association was released this month. It cites the work of an economics professor from Trinity University in Texas.

The report shows the impact of a minimum wage of $10.10 an hour. That's what a Racine democrat is proposing. Right now, the minimum wage in Wisconsin is $7.25 an hour.

State Representative Cory Mason, (D) Racine, wants the minimum wage to go up 95 cents per year for three years, but he's facing more than a few obstacles.

A new study released by the Wisconsin Restaurant Association claims an increase in the minimum wage would cost the state thousands of jobs. Restaurant association spokesman Pete Hanson says the impact would be huge.

Hanson says, “Raising the minimum wage to $10.10 per hour would cost Wisconsin 16,500 jobs and also would cost state and local government in Wisconsin 69 million dollars in revenue."

Hanson says a majority of the jobs lost would be entry level positions, which he says are valuable. Hanson says, “The $7.25 per hour minimum wage really is an entry level wage; it is an opportunity for people with no work experience, predominately young people, to get that first job learn some job skills, learn some skill that are going to help them through the rest of life."

But, the author of the bill, Mason, says it would benefit the economy.

Mason says, "The prediction is that it's going to lift more than a half a million people out of poverty and it's good for people who think if you do an honest day's work you should be paid an honest day's wage and it's good for smaller businesses who say that, what they need as much as anything, is customers that can afford their services. What we found in other states that do this, is that it benefits everyone involved."

Burger King owner, Mike DeRosa, disagrees. He believes it will hurt business. DeRosa says, "There's a lot of hidden costs to a wage increase and that just means that I'm going to have to raise prices. I'm going to have to get by with fewer teenagers and high school students who we've given a great opportunity to over these many years. "

Assemblyman, Dana Wachs of Eau Claire, says past minimum wage increases have stimulated the economy. Wachs says, “That’s the same argument that was used in the 50’s, it’s precisely the same argument and over time, while there might be growing pains, initially in the long run, it brings about a robust economy.”

Mason also says, when polled, 70% of people living in Wisconsin are in favor of an increase, saying if you work full-time you shouldn't be in poverty. But Hanson says, their study finds raising the minimum wage will do more harm than good. Mason says lawmakers won't make a decision on the issue until at least January.

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