Economic security pilot program set to head to Wausau Council as federal lawmakers consider minimum wage boost

Published: Jan. 26, 2021 at 6:40 PM CST
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WAUSAU, Wis. (WSAW) - Wausau’s Finance Committee is sending a proposal for a grant-funded pilot program to the common council. The program would look at how increasing the monthly income of those in need would affect those workers.

At the federal level, a group of bipartisan House and Senate lawmakers is looking into raising the minimum wage to $15. It’s also part of President Biden’s COVID-19 relief plan.

UW-Stevens Point finance professor Kevin Bahr says lower-income workers have been hardest hit by the pandemic’s impact on the economy. He believes they should benefit from the recovery.

“The United States is coming off the longest period of economic growth that ended in 2020, and there was never any increase in the minimum wage,” said Bahr, who’s also the chief analyst of the Center for Business and Economic Insight.

He believes lower-income Americans should profit when the economy bounces back from COVID-19.

“I think it gives you more of a feeling that you can participate in an economic recovery, financially. That you won’t be left behind when others might be gaining more than you are,” he said. “When the economy comes back, and it will come back… hopefully these people can go along for the ride,” he said.

But through Democratic and Republican leadership in Washington, federal wages haven’t increased. The minimum wage is $7.25 in Wisconsin.

“It’s been in place since 2009, and you’ve had a very long period of economic expansion, the longest economic expansion in the history of the United States, the minimum wage was not raised. 40% reduction in corporate taxes in 2018, and the minimum wage was not raised,” he said, also pointing out that when the economy grew in 2010, it didn’t change then.

Opponents of raising the federal minimum wage fear it could hamper recovery for restaurants and industries suffering. But Bahr predicts raising wages will be feasible once the pandemic improves, just not before we have a handle on COVID-19.

“You get COVID-19 under control, or hopefully just get rid of it, I think you’ve got a lot of pent-up demand by people who want to go to restaurants, they want to go to theaters, they want to go back to sporting events,” he said.

Bahr added that from a business standpoint, more money could improve employees’ mentality and consequently their work product.

Wausau is looking into how increasing wages would benefit the people who work here. Mayor Katie Rosenberg is looking to make the city part of a pilot program that would help a select number of people in need. Other cities have had 18-55 struggling families apply, and could set the applicant criteria.

The city is eligible for $100,000 in grant funding for the program.

“You give them an extra $500 a month for a year or a year and a half. Researchers from the University of Pennsylvania track what they’re buying, quality of life metrics,” Rosenberg said.

The idea is to give some in poverty a boost, not a full income, and see how it affects them.

“That’s what this means, people being able to just free up a little bit and maybe, pay off some bills, maybe they don’t have to go to that title loan place. Those are the kind of things you’re seeing happen when you have a little bit of extra cash,” she said. “The findings that these researchers get will actually drive policy around the nation, so it’s really cool to be a part of that, especially at the beginning.”

The full common council will discuss the proposal at their meeting on Feb. 9.

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