3 Wisconsin neighbors see minimum wage increases to start the year

While the Badger state’s minimum wage has remained unchanged for a decade and a half, three of Wisconsin’s neighbors increased their wage floor at the start of the year.

The minimum wage increased to $15 per hour in Illinois and $11.13 in Minnesota. Michigan’s minimum wage rose to $10.56 an hour and will increase again in February to $12.48.

Wisconsin’s minimum wage is $7.25 an hour.

The state rate has been at the same rate since 2009, when the national minimum wage increased to $7.25 an hour. If it had kept up with inflation, it would have risen to roughly $10.84 today, according to the U.S. Bureau of Labor Statistics inflation calculator.

But market forces mean $7.25 isn’t the wage floor for a lot of entry-level jobs in the state anymore, said Laura Dresser, associate director of the High Road Strategy Center, an economic think tank at the University of Wisconsin-Madison.

“Jobs are posting wages at $15 (or) $16 an hour on both sides of the Wisconsin border,” she said. “Whether you’re working at an Amazon warehouse on the Wisconsin side of the border or the Minnesota side, there’s not going to be a dramatic difference in those wages because they’re so far off that $7.25.”

But for some jobs, Dresser said, the minimum wage makes a big difference. She pointed to tipped jobs as an example.

In Wisconsin, the minimum wage for tipped workers is $2.33 per hour. In Minnesota, tipped employees are required to be paid the $11 minimum wage for all hours worked. And the minimum wage for tipped workers in Illinois is $9.

“In the cases where they’ve moved the minimum wage for tipped workers, I think that could have some impact on where servers or other tipped workers are choosing to put their labor,” Dresser said. “In those places, I can imagine workers moving away from Wisconsin, which has a labor shortage, into these other states.”

Apart from tipped jobs, some occupations in the traditionally low-paying service sector have average wages above the federal minimum, according to ZipRecruiter, an online job board. In Wisconsin, the website says the average retail salary is $16 an hour, the average for restaurant cooks is $13 an hour and the average for grocery store cashiers is $14 an hour.

Mike Semmann, president of the Wisconsin Grocers Association, said retailers in the state are “almost always” offering wages that are higher than the minimum wage. 

“If you’re working full time at a traditional retail grocery store, your compensation is going to be over that minimum wage,” he said. 

“The competition for workers has really accelerated that wage growth right now,” Semmann added. “Whether that’s an under 18 wage growth, over 18, full-time (or) part-time. All service industries have had to be very competitive when it comes to wages.”

Wages for the lowest-paid workers in Wisconsin have risen faster than pay for higher earners in recent years, fueled by a tight labor market, according to a 2024 report from the High Road Strategy Center.

“The marketplace is working, and honestly, it’s a workers market right now,” said Kurt Bauer, president of Wisconsin Manufacturers & Commerce, the state’s largest business group. “If you’re willing to work, you’re going to be able to find a good paying job.”

Even though many jobs are offering more than the minimum wage, a 2023 report from the High Road Strategy Center found that raising the minimum wage to $15 an hour would lead to pay increases for 379,300 Wisconsinites, or 14.5 percent of the workforce.

Of those, 232,800 workers make less than $15 an hour and would see their wages rise, while 146,500 already make $15 or more an hour and would see their pay increase to compensate for the wage floor increasing, Dresser said.

“The minimum wage forces those employers to pay more so that you have a more level playing field between your better employers and your lower-wage employers,” Dresser said. “That’s a dynamic, a virtuous dynamic, that’s going on in these other states that we just don’t get.”

One of the workers who makes more than $15 an hour but could see an indirect raise from a minimum wage increase is Honore Schmidt. She’s a Winnebago County resident who works as a third shift lead at a convenience store in the Fox Valley. She said the base pay for third shift is $18 an hour, which translates to $15 an hour plus an extra $3 shift premium.

“I switched to third shift because I just wasn’t making ends meet anymore,” she said. “I was having more expenses as I left college. I was starting to have to pay back student loans, and just with the general rise in prices, I had to switch to third shift to make things work.”

Even though she makes more than the minimum wage, she said paying all of her bills would be more difficult if she didn’t live with her fiancé.

“If we didn’t have a double income household, I would not be able to pay the rent, pay the utilities and pay those other variable expenses without feeling it quite a bit in my wallet,” she said.