Marquette economist: There’s a better solution for the working class than raising the minimum wage

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MILWAUKEE (WITI) -- Protesters marched from McDonald's to Burger King near Fond du Lac and Capitol Thursday morning, September 4th. They're calling for a minimum wage of $15/hour. It sounds a lot better than calling for an increased and expanded earned income tax credit.

Marquette economist says raising the minimum wage is not the best way to ensure working class people earn enough to get by. Andrew Hanson has studied the minimum wage, and believes increasing tax credits for low-income workers is a better solution.

"It depends on the characteristics of the worker, but say it would give you an extra 25 cents for every dollar you earn -- if you're earning $8 an hour, it would really be like you're earning $10 an hour and then at the end of the year, Uncle Sam sends a bigger check," said Hanson.

The protesters say it's reasonable to ask fast food chains to pay their employees more, because those business have the money to do it.

"These workers are hard-working Americans. They literally bring in billions of dollars in profit for these corporations. The least they should be able to do is survive without public assistance," said Jennifer Epps-Addison, from Wisconsin Jobs Now.

Hanson says that could have unintended consequences, especially for low-income families.

"If you think more carefully about it, you might say, well McDonald's isn't gonna take that out of their bottom line. What are they gonna do? They're gonna raise prices. And who buys from McDonald's? It tends to be people, not all, but on the lower half of the income distribution," said Hanson.

Hanson says that's the beauty of expanding the earned income credit. It would raise wages without raising prices or risking layoffs.

"The reason economists like that is because employers are not sharing that burden. The burden is shared by all taxpayers," Hanson said.

Right now, there is a federal earned income tax credit. 25 states, including Wisconsin offer their own credits as well.

Information about the Earned Income Credit can be found by clicking the links below:

Federal Income Credit

State Income Credit 

10 comments

  • opinin8d

    For some reason I was expecting a different answer……I guess some believe that entitlements are just a basic right. It’s not the taxpayers responsibility either! I think the better answer would be to take away more of the handouts so they are forced to make better decision or face the consequences.

    • dancing in the ruins

      i was also expecting a different answer. i was thinking it would be something along the lines of free or subsidized basic work skills education. you know, something to improve their marketable job skills.

      if that’s his solution then i say just give them their $15/hour and watch them all lose their jobs to automated equipment. at least i don’t have to pay for that. oh wait, i guess i will pay for their welfare. gee maybe i should quit my job, burn my degree, and just join them.

  • Petey

    “the burden is shared by all taxpayers”? ARE YOU KIDDING ME?. Why don’t you so called economists just come out and say it…bring in Socialism. Let’s support everyone who doesn’t want to work and everyone who is working for minimum wage. What a moronic statement to make, Hanson.

  • Chris Multerer

    I applaud McDonald’s, BK, Taco Bell(PespsiCo), and the rest of these corporate giants for not caving into the demands of these brainwashed humanoids. They chose to apply at, and work at a fast food chain. Here’s a word of advice if you can read and possibly think for yourself..if you don’t like it ..LEAVE !!

  • Help us..

    “We’re worth more” their shirts say. No, really you’re not! Flipping burgers and dropping fries, no brain power needed to do that…a 11 year old could do it with NO problem, shoot my 9 yr old could do it with no problem!

  • Unknown

    McDonalds starts hiring at the age of 14 for a reason. It doesnt take a ton of talent dedication and education to work there. So because the folks that are demanding they are worth more because they are older and do the same work as a 14 year old is pure entitlement. I would quit my current job in a heartbeat and work at McDonalds if minimum wage went to $15 an hour because I know how easy McDonalds is to work at. I worked there for 7 years through Highschool and College. Even with my college degree I did NOT start anywhere with a BA at $15 an hour.

  • badgerbybirth

    Doesn’t Wisconsin have a shortage of skilled labor for things like machinists and welders? If they want to earn $15 per hour perhaps they should get themselves the skills to do it.

    • harvester of sorrow

      And truck drivers. For $2500 you can take a 10 week course at a number of different Wisconsin technical colleges and get a class A CDL. And many companies will reimburse you for the tuition. Get HAZMAT certs and drive a tanker truck and you can quickly make north of $50k/year.
      Even if these workers get $15/hour and were lucky enough to get a full 40 hours a week that’s only $31k/year. Why wouldn’t you learn a technical trade instead?

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