Wage plan could benefit state workers

by Michael Jacob

A proposed federal minimum wage hike would benefit more than 100,000 Wisconsin workers, or nearly 5 percent of the state’s work force, according to new data from the Center on Wisconsin Strategy and the Economic Policy Institute.

The congressional proposal would raise the minimum wage by $1.50 in three steps, to $6.65 in 2003. The current wage of $5.15 per hour has been eroded by inflation to just 70 percent of its 1968 peak, and 76 percent of its 1979 value, according to COWS and EPI.

If passed, the recommended wage increase would directly benefit 122,641 Wisconsin workers, or 4.9 of the Wisconsin work force, says Joel Rogers, professor of sociology and law and founder and director of COWS.

“This $1.50 increase would greatly improve the wages of a significant number of Wisconsin workers, particularly women and minorities,” Rogers says. “And experience shows that a modest phased increase like this shouldn’t hurt their employment prospects. This is sound public policy.”

Nationally, 11.9 million workers, or 9.9 percent of the workforce, would have seen an increase in their hourly wage if the minimum wage had been at the proposed level of $6.65 in 2000.

However, the current proposal, by Sen. Ted Kennedy, D-Mass., and Rep. David Bonior, D-Mich., would phase in the increases over three years. If wages continue to grow with inflation by the time the increase is fully implemented in 2003, just 5.8 percent of the work force would receive a pay increase.

A majority of these workers (60.6 percent) are women, and 68.2 percent are adults age 20 or older. Nearly half (45.3 percent) work full-time, and another 34 percent work between 20 and 34 hours per week. A disproportionate share of blacks and Hispanics would be impacted.

“Sometimes people get the impression that minimum wage jobs are held just by teenagers seeking part-time jobs for spending money. That’s just not so. Most people earning these wages are adults, on whom their families rely to put bread on the table,” says Rogers.

“What we’re currently saying to those adults is ‘Go ahead, work fulltime, year-round. It won’t make much difference. You’re still going to live below poverty.’ I think that’s the wrong message to send to working Wisconsin.”

At the state level, the Wisconsin Senate Labor and Agriculture committee approved a bill Feb. 6, by state Sen. Dave Hansen, D-Green Bay, to increase the Wisconsin minimum wage to $6.80. That figure is based on the federal poverty level for a family of three, currently set at $14,150. The bill now goes to the full state Senate for consideration.

COWS is a research and policy center based at UW–Madison dedicated to improving economic performance and living standards in the state. The figures for number of workers affected is based on EPI’s analysis of Current Population Survey ORG data from 2000.