Labor Day 2015 in Wisconsin

From the Wisconsin Department of Workforce Development, October 2014, in re: the $7.25/hour minimum wage.

The Department [of Workforce Development] has determined there is no reasonable cause to believe the wages paid to the complainants are not a living wage.

Refer to the letter for an explanation of the analytical basis for DWD’s conclusion. More discussion of this issue in this post.


Figure 1: Minimum wage in $/hour (blue) and in 2009$ (red). Deflation uses CPI-All.

Update: As Rick Stryker points out that the Wisconsin government, in its wisdom, relegated to oblivion after determining that $7.25 was a living wage. So that was the Wisconsin government’s last statement on the issue.

In any case, it’s straight out of the playbook — if you don’t like it, define it away so you don’t have to worry about it.

21 thoughts on “Labor Day 2015 in Wisconsin

  1. Patrick R. Sullivan

    Is this the same law in Wisconsin that reads, ‘A living wage is defined under the law as “reasonable comfort, reasonable physical well-being, decency and moral well-being.” ‘

    How does a professional economist/statistician measure ‘decency and moral well-being’?

      1. Ricardo


        Why do you still beat an old dead horse’s bones? It is as bad as your proposal that everyone in the US be on food stamps.

        1. Menzie Chinn Post author

          Patrick R. Sullivan: As I recall, you’ve had almost a year to admit that you made an erroneous statement regarding depth of the downturn in Canada vs. US during the Great Depression: You stated unequivocally:

          Canada … had a less severe depression than the USA.

          And this statement is wrong.

          And yet, I have not heard one peep from you on this point, despite numerous queries. (Did I say something about thinking about the level of the living wage it a year ago?).

          1. Ricardo


            The bones of that poor dead horse are crying out for peace. Maybe you could sign him up for food stamps?

  2. W.C. Varones

    The whole notion of “living wage” is absurd.

    High school kids aren’t allowed to work in a pizza joint for less money than a single earner would need to comfortably raise a family?

    Sheer idiocy.

  3. Jay

    Living wage is the left hiding behind a non falsifiable claim the same way a religious person proclaims God exists.

      1. W.C. Varones

        Leftist central planners hate liberty and the pursuit of happiness.

        Hence their effort to dictate to all people what conditions they are allowed to work under.

        1. howard

          So when monopolists or oligopolists dictate working conditions, you’re fine with that? Would you care to share with us how many non-oligopolistic industries there are in America?

  4. Joseph

    W.C. Varones: “High school kids aren’t allowed to work in a pizza joint for less money than a single earner would need to comfortably raise a family? Sheer idiocy.”

    According to the BLS, a little over 21% of minimum wage workers are high school kids. Half of all minimum wage workers are over the age of 30. A third are over the age of 40. Minimum wage is not about high school kids.

    1. W.C. Varones

      Minimum wage is about high school kids when you outlaw their employment based on a theoretical single-earner nuclear family with zero skills.

  5. Rick Stryker


    This post is so 2014. Are you aware that Walker and the Wisconsin legislature in 2015 changed chapter 104 of the Wisconsin code so that it no longer refers to a “living wage” but rather refers to a “minimum wage,” which is defined to be $7.25 per hour. So, we no longer need to engage in philosophical debates about what a living wage is.

    1. Menzie Chinn Post author

      Rick Stryker: Yes, I knew, but that bit of head-in-the-ground legislating I’d forgotten after the passage of so much other legislation of dubious empirical and theoretical backing. Still waiting for the structural budget surplus to appear…

  6. Ricardo


    Help us. After consulting your data what do you propose as a “living wage” in Wisconsin and in the US?

  7. Bruce Hall

    Minimum wage is not a “living wage” in the sense that it provides an “average” standard of living. It is a wage paid to those who are seeking part-time work as students or first jobs. It is also wages paid to those who chose not to prepare themselves for anything else. It is a wage that employers will pay instead of automating or closing their businesses. It is a wage that supports what customers of certain low value, low priority businesses are willing to pay for their products. $10 double at Wendy’s anyone?

    1. baffling

      a living wage is a minimum number by which the government no longer needs to subsidize an employers workers with welfare benefits. so bruce, you either pay the $10 double at wendy’s directly, or you continue to complain about higher taxes which are used to subsidize the $10 burger to $7, with the additional $3 paid in higher taxes. either way, workers need a minimum amount of income to survive. that is how a society operates. would you rather they work for that support, or collect it directly as a benefit?

  8. Rick Stryker


    Although the question is moot at this point, a number of commenters such as Ricardo, Patrick, etc. have asked what I think is a legitimate question. If you disagree with Walker saying that $7.25 is a living wage, then what is a living wage in Wisconsin?

    Baffles came close to a definition when he said it should be an amount such that you no longer need welfare benefits. Since we need to be a bit more precise in our normative judgment, I’d point out that one of the Popes defined the just or living wage as that wage sufficient for a single worker to support a family of four in reasonable dignity.

    So, using Baffles and the Pope, here’s what Walker could have done. For a family of four, Foodshare Wisconsins has a gross monthly income limit of $3976 and net limit of $1988. If you take some standard deductions allowed on a gross monthly income of $3600, you can get down to a little below the net limit for which you’d start to get foodshare benefits. So, we could define a living wage of $3600/160 = $22.50 per hour. This wage is similar to what you see in Denmark, Sweden, etc.

    Would you agree that Walker should have raised the minimum wage to $22.50 per hour under the previous law? Do you still believe the employment effects would be negligible if the minimum wage were this high?

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