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Tracy Kosbau
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October 14, 2014

Minimum Wage Hike Not Good for Wisconsin’s Economy

MADISON – The Wisconsin Restaurant Association released a statement in response to a planned rally at the state capitol today urging Scott Walker to raise the minimum wage in Wisconsin.

“Wisconsin’s economy is improving, slowly but surely.  It is not, however, back to a level of growth where a minimum wage hike won’t cause businesses to go under and jobs to be lost,” says Ed Lump, President & CEO of the Wisconsin Restaurant Association. “Raising the minimum wage at this time is not going to be good for Wisconsin’s economy.”

The debate over the economic effects of minimum wage hikes is over.  The vast majority of credible empirical studies predict job losses to result from minimum wage increases.  Recent Wisconsin studies have predicted between 16,000 and 27,000 jobs will be lost in our state if we mandate a minimum wage of $10.10 per hour.

Raising the minimum wage will eliminate starting jobs in the name of higher paying jobs. “Many of those entry level opportunities to gain work experience and skills, or get back on your feet when you’re down on your luck, are going to disappear,” says Lump. “On the other side of that coin, you have some employees who will get higher wages. But according to a 2014 Employment Policies Institute study, those employees already have an average household income of $58,812.”

According to federal Bureau of Labor Statistics data, 85 percent of minimum wage employees are not heads of households.  It is a fact that those 85 percent of minimum wage employees are second, third and fourth wage earners in their families, not single parents trying to raise a family on the minimum wage.

“The restaurant industry offers an opportunity to everyone who is willing to work, no matter who they are, or where they’re from,” according to Lump.  “For the parent who needs a job that works around child care needs, or the student who needs flexible hours, or that young person with no experience, the restaurant industry provides a critical opportunity that few other industries do.”

Nine out of 10 restaurant employees say they are proud to work in the restaurant industry, while three-quarters believe the industry offers them a strong career path and upward mobility, according to a landmark study of the restaurant industry workforce conducted in August of this year by the National Restaurant Association Educational Foundation (NRAEF).  The study details the opinions of nearly 5,100 Americans who currently work or formerly worked in the restaurant industry, as well as those who own or operate restaurants.

“Governor Scott Walker is focused on creating more high-paying jobs in Wisconsin.  He wants to help manufacturing firms grow in this state, lure new companies to Wisconsin and grow our overall economy, and we applaud these efforts.  A minimum wage hike would run counter to these efforts – eliminating jobs and reducing economic activity in this state.”

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Since 1933, the Wisconsin Restaurant Association has been dedicated
to the promotion, protection and improvement of the foodservice industry.

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