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Minimum-wage workers in 19 states saw their paychecks increase this year. But Wisconsin hasn’t changed its minimum wage — just $7.25 per hour — for 17 years, shrinking the buying power of the lowest-earning workers.

Wisconsin ties its minimum wage to the federal level, which hasn’t budged for its longest stretch in history. Had Congress indexed the wage to inflation in 2009, it would have risen to $10.88 in 2025. That’s a difference of $145.20 over a 40-hour workweek. 

Elsewhere, 34 states, territories and districts have set minimum wages above $7.25.

Neighboring Minnesota raised its minimum wage from $11.13 to $11.41 this year, while Michigan’s leaped from $12.48 to $13.73. Illinois kept its threshold at $15, the highest level among noncoastal states.

In 2024, about 1% of the Wisconsin workforce earned at or below the state’s minimum wage. Those people generally worked as salespeople, automotive service technicians or food preparation workers, U.S. Census data show.

Wisconsin’s tipped workers have an even lower minimum wage of $2.33 per hour, slightly higher than the $2.13 federal minimum, which has not changed since 1991.

Meanwhile, the average living wage for a single adult with no children in Wisconsin in 2025 is $20.96, according to MIT’s living wage calculator, with higher costs in metropolitan areas — including $22.18 in Madison and $21.07 in Milwaukee and Waukesha. The living wage is significantly higher for adults who raise children and lower for people living with a working partner. 

New York campaign sparked ‘Fight for $15’

Campaigns to raise the minimum wage have regularly drawn national headlines. In 2012, fast-food workers and their supporters began calling for a $15-per-hour minimum wage in New York City. Their victory inspired a broader ‘Fight for $15’ movement, including in Wisconsin, as Wisconsin Watch previously reported.

This year, The Living Wage Coalition — a group of labor and progressive organizations — launched a campaign to raise Wisconsin’s minimum wage to $20 per hour, calling the status quo far below a reasonable standard of living for the lowest-wage workers. 

An increase to $15 per hour would be politically popular and directly or indirectly raise the wages of 231,800 (18%) women workers, 36,200 (25.6%) Black workers and 50,200 (26.6%) Hispanic workers in Wisconsin — narrowing gender and racial wealth and income gaps that are some of the largest in the nation, according to a 2025 High Road Strategy Center report. The University of Wisconsin-Madison-based “think-and-do tank” focuses on solutions to social problems — including those related to the environment, opportunity and democratic institutions. 

Still, multiple bills to raise Wisconsin’s minimum wage — largely proposed by Democrats — have stalled in the Legislature. Republican lawmakers have cited concerns about burdening small businesses.

Higher wage ‘has to come from somewhere’ 

Minimum-wage hikes — depending on the size — can bring a mix of positive and negative economic consequences, according to Callie Freitag, assistant professor at the University of Wisconsin-Madison’s School of Social Work. 

“The good thing is that earnings would go up for workers. Employers would raise wages and be able to pay workers more,” Freitag said. “But the money to pay workers more has to come from somewhere.”

Economists worry that dramatic minimum-wage hikes could lead to higher consumer costs  — or prompt businesses to cut worker hours or eliminate their jobs entirely, Freitag added.

The key would be an increase that benefits the lowest-paid workers without significantly affecting the broader economy. But it’s unclear what that sweet spot is.

Conditions of the labor market — the supply and demand for workers — shape wages across most of the economy. Wages typically increase when there are more openings than workers, and they decrease when there are few openings for available workers. 

Setting the minimum wage close to or below an equilibrium wage — where the demand for labor matches the supply — only minimally affects wages across the market, economists suggest. 

States that hiked minimum wages saw slightly higher gains across the lowest-tier wages (the bottom 10%) between 2019 and 2024, but not enough to claim a correlation, an analysis by the liberal-leaning Economic Policy Institute (EPI) found. A range of factors could have shaped the wage increases, which also played out in the Midwest.

Wisconsin has seen slightly faster growth in bottom-tier wages than its neighbors — even without increasing the minimum wage. The state’s bottom-tier wages increased from $10.92 hourly in 2009 to $14.58, Wisconsin Watch found by analyzing EPI’s data.

Bigger hikes strain employers 

While basic economic principles suggest that a 10% increase in the minimum wage would decrease the hiring of unskilled workers by 1 to 2%, recent studies suggest an even smaller shift, or no effect at all. 

Most minimum-wage studies published between 2004 and 2024 have shown little or no job loss, Ben Zipperer, an EPI senior economist, found. 

Researchers tend to focus most on cities and states that have significantly increased their minimum wage. Seattle, Washington, which has hiked its threshold annually since 2015, has among the highest in the country at $21.30 this year. 

In a 2022 study, University of Washington researchers found that Seattle’s minimum wage increase to $11 hourly in 2015 “had an insignificant effect on employment,” but a spike to $13 in 2016 “resulted in a large drop in employment.” 

But the findings might not directly apply to other places, the researchers found, because industries and the makeup of the labor force might look and act differently elsewhere. 

A separate University of Washington study found that a minimum-wage increase to $15 hourly affected most child care businesses, which commonly responded by raising tuition and reducing staff hours or total number of staff — potentially harming staff and lower-wage customers.

What work is worth

“Minimum wage legislation commonly has two stated objectives: the reduction of employer control of wages; and the abolition of poverty,” George Stiegler, a leader of the Chicago school of economics, wrote in 1946 — an era when Congress was debating bigger increases to the minimum wage in the policy’s early years. 

But Stiegler was pessimistic about the prospect that minimum-wage hikes were the best way to eliminate poverty. He instead called for lawmakers to grant lower-income families other forms of relief, including tax cuts and credits. 

That spirit was reflected in the “no tax on tips” bill, which the Wisconsin Assembly passed this month to benefit tipped workers. 

Still, Laura Dresser, associate director of the High Road Strategy Center, views the minimum wage as an important floor to benefit workers at the margins and signal “work is worth this.” 

“People who are working full time should be able to afford life,” she said. “At $7.25 per hour, there’s almost nothing you can afford, and it feels far below what a wage floor really should function as.”

DataWatch: Wisconsin hasn’t raised its minimum wage for 17 years. What does that mean for workers and the economy? is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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Supporting a second school system with public money

Taxpayers through school district budgets provide $10,877 for each K–8 voucher student and $13,371 for each voucher student in grades 9-12 who enrolls in one of the three voucher programs. Each student who participates in the Special Needs Scholarship Program receives $16,049. Those amounts will increase by 4%, 3.2% and 2.6% respectively next school year.

Except in Milwaukee, where the program is directly funded by the state budget, the funding is deducted from the state aid to each school district. This school year, $357.5 million was deducted.

For public schools, state aid roughly represents 45% of school funding. Federal aid, property taxes and other revenue cover the rest. Although the exact amount varies by district, public schools collected an average of $14,104 per student in property taxes and state general and categorical aid during the 2024-25 school year.

When the state redirected aid from public schools to pay for the Racine, statewide and special need vouchers, school districts were still allowed to raise revenue as if the private school student were attending the public school. So while the district pays $10,877 to the private school for a K-8 student, it can still collect roughly $13,362 in state general aid and property taxes, keeping the difference to pay for other students still in the public system.

Some cities, like Green Bay, have started adding a note to property tax bills stating the amount of money school districts levied to pay for private school vouchers.

In the meantime, Republican lawmakers proposed “decoupling bills,” which would have the state fully cover the Racine, statewide and special need voucher programs, similar to Milwaukee. That would prevent the money from passing through the public school districts, reducing the net revenue school districts have been able to collect for the past decade.

“The funding system is broken, and the link in current law between school choice funding and property taxes needs to be repealed,” said Carol Shires, vice president of operations, School Choice Wisconsin, an advocate group for the voucher system, in an email to Wisconsin Watch.

Private school market stabilizes with public funds

As homeschooling has gained considerable popularity over the past decade, the voucher program has saved many private schools from losing enrollment and likely closure.

“There really would not be a private school sector in Milwaukee, with a few exceptions, if it wasn’t for the voucher program,” said Alan Borsuk, senior fellow in law and public policy at Marquette University Law School, “because nobody had the money to pay tuition, and there was just no way to afford schools.”

Wisconsin private schools gained 1,687 students from 2011 to 2024, a stark contrast to public schools, where enrollment declined by more than 65,000 students. Homeschooling grew even more, by nearly 13,000 students.

More than half of all private schools (56%) now accept vouchers. This year, 91 private schools had 90% or more of its students participate in the voucher program.

There are fewer private schools, but more are participating in the voucher program

A Wisconsin Watch data analysis found that about half of the private schools that joined the voucher program between 2008 and 2024 grew their student population. 

A debate on effectiveness

When the voucher program was introduced in Milwaukee, lawmakers envisioned the program empowering low-income parents who couldn’t otherwise afford private schools to choose where their children are educated, bridging the education gap, and improving education quality for both the private and public school systems. 

“Choice gives poor students the ability to select the best school that they possibly can,” former Gov. Tommy Thompson said in a telephone interview with the New York Times in 1990. “The plan allows for choice and competition, and I believe competition will make both the public and private schools that much stronger.”

About 35 years after the program’s introduction, people still cannot come to a consensus on whether it improves education quality.

“Taxpayers fund choice students at a lower dollar amount than they fund public school students, yet those choice students achieve better outcomes,” Shires wrote, referring to the school year 2024-25 state testing results from DPI.

The DPI data cited by the organization showed a higher average test score for voucher students compared to their peers in public schools. 

However, that methodology has been criticized by reviewers affiliated with the National Education Policy Center, a university research center housed at the University of Colorado Boulder’s School of Education. The reviewers criticized the approach of directly comparing standardized test scores of voucher students with those of public school students, arguing that such comparisons are overly simplistic and misleading.

In his review, Stephen Kotok, an associate professor at St. John’s University, wrote that simply comparing average test scores between the two groups without accounting for nonrandom selection into voucher programs overlooks other factors that may influence student performance besides school quality. He also wrote that relying solely on standardized test scores to judge educational quality or productivity is a “crude” measure.

DPI uses report card systems to provide a more comprehensive review of school performances in addition to test scores. Last year, 85% of public schools and 85% of voucher schools met, exceeded or significantly exceeded expectations. However, less than half (43%) of the voucher schools were scored due to insufficient data. DPI cited small student populations and low test participation rates among voucher students for not assessing those schools.

Several recent studies indicate that the academic benefits of voucher programs are marginal.

An analysis of 92 studies on school choice students’ academic achievements published between 1992 and 2015 found a very slight rise in standardized test scores among students who transferred from public schools to voucher schools, according to Huriya Jabbar, an associate professor at the University of Southern California.

Even though earlier data tended to show positive effects from voucher programs, math scores for students who switched to voucher schools were less impressive, and even negative, particularly in newer and larger programs, according to a study by Christopher Lubienski, director of the Center for Evaluation and Education Policy at Indiana University.

Borsuk wrote that the voucher system does not improve the overall quality of education in a column for the Milwaukee Journal Sentinel. He noted the education quality of voucher schools varies by school, with a mixture of excellence and disappointment.

In addition, state laws do not protect private school students from discrimination as they do in public schools. Previous reports by Wisconsin Watch have found some voucher school students have faced discrimination because of their disabilities or sexual orientation.

Not just providing choice for public school students

RPCP and WPCP generally do not accept students previously registered in private schools, but the program makes an exception for grades K4-1 and 9. 

This year, one in four (1,129) newly enrolled WPCP students studied in a private school the previous year — even more than the 948 students who transferred from Wisconsin public schools. Comparatively, most newly enrolled Racine students came from public schools or had not previously attended any school.

MPCP does not have a similar requirement, and DPI stopped publishing the source of enrollment data in 2006.

Bringing religion into classrooms

Enrollment at MPCP jumped in 1998 as the program began incorporating religious schools after the Wisconsin Supreme Court ruled 4-2 the program didn’t promote state-sponsored religious education.

As of the 2025-26 school year, nearly all of the voucher schools are religiously affiliated.

Parents cite the religion-based curriculum, safer environments, strict discipline and small classrooms in their decision to send their children to private schools.

Parents of voucher students may opt out of the religious curriculum under the law, yet no available data show how often that happens. 

“Almost 30 years now, if there have been 25 cases of opt-outs, I’d be really surprised,” Borsuk said. “If you’re going to a religious school and don’t want to be there, then why are you going to that school? It’s basically as simple as that.”

DataWatch: Nearly half of Wisconsin private school students receive a taxpayer-funded voucher is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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Edith Butler is dealing with a real-world math problem: Her housing costs keep rising while a tax credit intended to help keeps shrinking. 

The widow and retired nurse, 68, lives by herself in a two-bedroom Eau Claire home. She paid $9,000 in rent over the course of last year, eating up more than 60% of her Social Security paycheck — her primary source of income. Her utility costs are also expected to hike next year.

She received $708 last year from claiming a homestead tax credit, which is meant to help lower-income homeowners and renters recoup some property tax costs. That was down from the $900 credit she received five years ago after paying just $6,600 in rent. 

In the past, the homestead credit has paid to fill her propane tank for about three months during winter and offset some other costs. But it’s dwindling each year because the state rarely updates eligibility guidelines and credit calculations for inflation. Butler’s credit shrinks whenever the federal government increases her Social Security payment to account for the rising costs of living. 

She’s not alone. Statewide homestead credit claims dropped from an average of $523 per recipient in 2013 to $486 in 2025, with thousands fewer claimants as fewer people remained eligible.

“These things have never adjusted. But we’ve paid into these programs all our lives. I paid taxes for 50 years, (and) my Social Security is my benefit that I paid in,” Butler said. “You work hard and you pay into programs, and then when you need them in your older years like this, they’re not there for you.”

The Legislature has not substantially updated the homestead credit for 25 years, causing its value to erode. Recent Democratic proposals to update program guidelines have failed to gain Republican support.  

A tax credit’s history

By the 1960s, many in Wisconsin acknowledged the regressive nature of property taxes — that lower-income residents pay higher shares of their income than richer households do,  John Stark, then-Assistant Chief Counsel in the Legislative Reference Bureau, wrote in a 1991 history of property tax relief in Wisconsin. But the state Constitution’s “uniformity clause” restricted what type of tax relief lawmakers can enact. 

Against that backdrop, a State Commission on Aging in 1962 held hearings around the state in which older adults expressed concerns about health care and property taxes. The Legislature responded in 1963 with the homestead credit. Residents 65 and older could claim up to $225 (the equivalent of $2,380 today), with the precise calculation based on income, property taxes paid through ownership or rent.

The Legislature expanded eligibility over the years, notably in 1973, when it lowered the age minimum to 18. That dramatically boosted total claimants and payouts. By 1988, more than 250,000 people received a collective $100 million (roughly $270 million today) in credits.

The trend has since reversed. 

Fewer than 67,000 residents claimed a collective $32.6 million in credits last year — a precipitous plunge, Department of Revenue data show.

The program’s income cap today — $24,680 — has barely budged since 2000. The nearly identical cap of $24,500 in 2000 is the equivalent of $45,812 today when adjusted for inflation.

Meanwhile, the program’s “phaseout income” of $8,060, under which homeowners or renters can recoup the maximum 80% of property taxes paid, has increased by only $60 since the 1989 tax year.

Today’s maximum credit a household can claim ($1,168) is just $8 higher than the 1990 level.

Diane Hanson, Butler’s tax agent, said her clients are receiving smaller credits each year or becoming ineligible as inflation pushes wages or Social Security payments above the static income limit. 

Still, Hanson suspects many who remain eligible don’t realize it.

The homestead credit helped Hanson through her most challenging times. After learning about it at her local library, she claimed the credit for several years while raising her two children during a divorce, one of them with disabilities. 

After becoming a tax agent in 2019, she began to educate clients facing similar circumstances. They include Renata Braatz, who raises her 12-year-old son and spends about 30% of her monthly income on rent through the Section 8 voucher program. She claimed about $600 through the homestead program last year. She spent it on groceries and other expenses for her son.

“I never knew about it. I lived here for six years, and I just started doing it two years ago,” Braatz said. 

But asking questions paid off. 

“Renata was proactive, reaching out, phoning us, and asking if there could be any credits for her. I think that is more than some folks know to do,” Hanson said. “Before I was a tax professional, I myself didn’t know how much the federal earned income credit can help out parents.”

Democrats call for credit’s expansion 

Senate and Assembly Democrats earlier this year introduced identical bills to expand the homestead credit — allowing households earning up to $35,000 to claim it and indexing the maximum annual income, phaseout income and maximum credit to inflation. The proposal would have reduced state revenue by an estimated $36.7 million, $43 million and $48.8 million over the next three fiscal years.

Democratic Gov. Tony Evers also proposed a homestead credit expansion in his last two-year budget. 

Neither  proposal advanced in the Republican-controlled Legislature. 

Sen. Mark Spreitzer, D-Beloit, authored the Senate version of the bill with colleagues. His district borders Illinois, which offers a range of more generous homestead tax incentives. Several constituents who previously lived in Illinois asked him why Wisconsin doesn’t offer what Illinois does, inspiring the legislation.

The Wisconsin Constitution’s uniformity clause prohibits lawmakers from enacting Illinois-like tax exemptions for older adults or other low-income residents, Spreitzer said, but the credit offers a legal work-around.

“There’s not really another credit that takes the place of this,” he said. “That’s why the homestead credit is so important.”

Spreitzer said he plans to reintroduce an expansion bill, and he encourages residents to share their perspectives with their representatives.

“If we want to do something about affordability, this is a very direct thing we can do,” Spreitzer said. “We’re not creating a new credit here. This already exists. We’re just talking about increasing who qualifies and how much money they would get back, and that’s money that they would directly be able to get back on their taxes and then spend to put food on the plate for their families.”

Hanson sees a path for bipartisan support for an update. 

“The alternative is to see it dwindle,” Hanson said. “It hurts the segment of people that actually need it, the people who just don’t get much help anywhere. They’re still working hard to be independent.”

As living costs soar, tax relief shrinks for low-income Wisconsin residents is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.