EAU CLAIRE (WQOW) - President-elect Joe Biden's COVID-19 relief proposal includes a plan to more than double the federal minimum wage.
At $7.25 an hour, the federal minimum wage hasn't seen an increase since 2009. But now, Joe Biden wants to raise that to $15 an hour, a change some local residents say is more than welcome.
"I work on campus so I started out making $7.25 an hour and it's definitely not a living wage. So yes, I definitely think they should raise it," said Marin Munos, a senior at UW-Eau Claire.
"The bills increase, the standard of living has increased, so we definitely have to increase the wage just to live a decent life. Not even a comfortable life, just to live a decent one," said Aidan Voon, a junior at UW-Eau Claire.
But Daniel Goelzer, who co-owns the Calico Shoppe in downtown Eau Claire, worries raising the minimum wage would increase labor costs and hurt small businesses.
"We feel that it would just not help the market. Jobs are hard to come by right now with the whole pandemic situation so I think it would be detrimental. There will definitely be some businesses that won't be able to meet that and will look for ways to have fewer employees," Goelzer said.
UW-Eau Claire economics professor and chair of the economics department Thomas Kemp said the potential increase in labor costs could lead to that cost being passed onto customers, but he added the pay hike could also lift some families out of poverty.
"Research shows that increases in the minimum wage tend to reduce income disparity. That is the difference between the richest and the poorest people so it shrinks that gap. Of course, that's a trend that's been increasing, the reverse, the income disparities in the United States have been increasing. So this would move us back in the opposite direction of reducing those differences," Kemp said.
Kemp said right now though, it's hard to say what kind of effect raising the minimum wage during the pandemic would have on the overall economy.
"It's impossible to answer that question definitively because we can't know the future," Kemp said. "You are increasing some business costs so that of course has some impact. But at the end of the day, I'm going to be pretty surprised if a mild increase in the minimum wage has significant negative impact on the aggregate economy."
According to the Congressional Budget Office, raising the minimum wage gradually to $15 by 2025 would boost wages for 17 million Americans, but the office also estimates 1.3 million other workers would lose their jobs.
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January 20, 2021 at 06:46AM
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Should the federal minimum wage be raised to $15 an hour? - WQOW TV News 18
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