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Republican Sen. Ron Johnson, from Wisconsin, was worth at least $10 million as of 2019, but he’s worried about wages rising a bit too fast because of the free market, or something.
Johnson spoke with Madison TV station WKOW on Sunday about his support for a bill in the Wisconsin Legislature that would sever the state from enhanced federal unemployment benefits. Currently, unemployed people can get $300 per week in benefits on top of what they get from their state governments, but so far 23 states have moved to end the benefit at the end of June rather than September, when Congressional authorization expires.
Johnson echoed the claim from governors in those states as well as the U.S. Chamber of Commerce that the unemployment benefits “prevent people from having the incentive to go back to work.”
"Unemployment benefits are not meant to provide replacement wages," Johnson whined. “We’re back in a normal type of economic cycle now where unemployment benefits are supposed to be a bridge to a new job.”
But when asked by host A.J. Bayatpour about the increasing costs of childcare and how low wages barely cover it—women have left or been forced out of the workforce during the pandemic at a higher rate than men—Johnson posed another explanation: Actually, workers are making too much money too fast.
“Wages are set in the marketplace, and businesses pay what wages they can afford based on the competitive situation,” Johnson said. “I just have greater faith in the marketplace setting appropriate wage rates.
“Wage rates are now being bid up because there is a labor shortage, and if you’re a worker, that’s a good thing. But here’s the downside to that,” he added. “Commodities go up and down, and you can have temporary increases in prices that come back down.”
Wage rates increasing, he said, “creates permanent inflation.”
Johnson worried that workers making more money might not be a good thing after all.
"Increases in wage rates ratchet up and that creates permanent inflation, so you may feel good about getting a five, or six, or seven percent raise, but if general inflation is six, seven, or eight percent, that increase is just completely wiped out,” Johnson said. “I’m highly concerned that what we are looking at now is a witches’ brew being concocted with all the ingredients for stagflation.”
Over the past several decades, wages for workers have stagnated—particularly for low-wage earners—and inequality has grown exponentially. The obvious, immediate fix would be to hike the federal minimum wage, which has been at a pitiful $7.25 since 2009, and index it to inflation. Ten states plus Washington D.C. have already done just that, according to the Pew Research Center.
Wisconsin, where the minimum wage is still $7.25, is not one of them.
Raising the minimum wage to $15 could cost 1.4 million job losses, the Congressional Budget Office found earlier this year. But the hike would also affect 17 million workers and pull nearly 1 million people out of poverty. (National Bureau of Economic Research associate and UMass Amherst professor Arindrajit Dube estimated that a $15 minimum wage would lead to fewer than 500,00 job losses total in an op-ed for the Washington Post in January.)
Either way, it looks as though Wisconsin won’t be joining the nearly two dozen states who’ve cut off federal unemployment benefits so far. Gov. Tony Evers said last week that he was “strongly considering” vetoing the bill, andRepublicans in the legislature later voted to reinstate work search requirements for unemployment.
"It's not a surprise, but at the end of the day this whole pushback against poor people and people that are struggling during this pandemic, I have trouble understanding," Evers told the Milwaukee Journal-Sentinel.