Raising Wisconsin’s minimum wage would significantly cut poverty. So why is it still $7.25? | Milwaukee Neighborhood News Service
Molly Davis and Gretchen Gerlach (Wisconsin Watch)
July 22, 2021
For26-year-old Olivia McKnight, raising the minimum wage to $15 an hour wouldtransform her life.
Asa full-time Popeyes employee in Milwaukee, McKnight makes $10 an hour. Thisisn’t nearly enough to support herself and her three children. She also works asecond job. The long work hours have forced her to miss out on time spent withher children, including holidays and key life moments.
For29-year-old James Rudd, who earns more than $15 an hour now, he is finally ableto pay for the things he needs. And he now fights for all workers in Wisconsinto reach at least $15 an hour.
Incontrast with McKnight, Rudd’s maintenance job at AT&T’s Milwaukee officecleaning floors and changing light bulbs has made his life easier. He canafford health insurance, bus fare and to keep current on his bills — all ofwhich were out of reach when he earned $7.25 or $8 an hour.
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That’swhere McKnight is now.
“Itry to provide for my family day to day, month to month, paying rent, payingelectric, lights, and trying to find babysitters,” she said. “It’s definitelyhard, it takes the majority of my time away, and it’s like I’m almost workingfor pennies.”
Roughly1 million hourly workers nationwide earn the federal
minimum wage of $7.25 an hour or less. Like others fed up with lowearnings, McKnight recently joined the Fight for $15, a global politicalmovement working to increase the minimum wage for all underpaid workers.
InWisconsin, where the racial wealth and income gaps are some of the greatest inthe nation, many feel raising the minimum is long overdue. According to a 2019Marquette Law School Poll, 55% of Wisconsinites support raising the minimumwage, while 39% oppose it. And Black women like McKnight are among those whowould benefit the most from it.
Blackand Hispanic women are more than twice as likely as white men to make less than$15 per hour, according to calculations by The
Washington Post using federal jobs data. About 46% of Hispanic women and39% of Black women earn less than $15 an hour, while only 18% of white andAsian men earn less than $15 per hour. In Wisconsin, an estimated 43.7% of
residentsearn less than $15 an hour.
Becauseof grassroots movements like the Fight for $15 and growing political support,eight states and the District of Columbia have already passed legislation toraise the wage to $15 an hour, most recently Florida, according to the UC Berkeley Labor
Center.
Butnot Wisconsin. It is among 21 states whose minimum wage matches the federallevel of $7.25 an hour. In 10 other states, the minimum is higher but stillunder $10, the UC Berkeley Labor Center reports.
Legislators,activists and community members have organized, lobbied and proposed changes tothe federal and state-level wages for years, well before Democrats triedunsuccessfully to include a federal $15 minimum wage in the pandemic reliefpackage passed in February 2021. `
InJanuary, Democrats reintroduced the Raise the Wage Act, which would gradually increase thefederal minimum wage to $15 per hour by 2025 and end pay below-the-minimum wagefor tipped workers. Under the bill, the minimum wage would increase immediatelyto $9.50 an hour, then to $11 per hour next year, $12.50 in 2023, $14 in 2024and then $15 in 2025. A similar bill was introduced in 2019 but nevercleared the GOP-controlled Senate.
Themain reason minimum wage bills have stalled: Opponents argue that raising itwould force many businesses to close or cut their workforces, resulting infewer jobs.
Arecent Congressional Budget
Office report estimated that implementing a nationwide minimum of $15 anhour would lift nearly 1 million people out of poverty — but employment wouldbe reduced by 1.4 million workers. Wisconsin Manufacturers and Commerce, apowerful business lobby, argues raising the minimum wage would reduceopportunities for entry-level workers by making it more expensive for companiesto hire them.
Economic disparities huge
Lowwages have long been a problem for workers of color in Wisconsin. Black medianhousehold income in Milwaukee has fallen by almost 30% since 1979. In fact, theBlack median household income of $29,655 is the lowest among the top 50 U.S.metropolitan areas, and it is only 42% of white median household income, whichin 2018 was $70,561. That’s according to a 2020 study by the University ofWisconsin-Milwaukee Center for Economic Development, which controlled for costof living while comparing metropolitan areas.
“Ithink that’s a profound finding,” said Marc Levine, co-founder of the centerwho led the study. “It tells us a lot about not only our history, but aboutwhat’s happening today in Milwaukee and how little progress it has made.”
Levine’srecent research focuses on Black communities and how they fare in the nation’s50 largest metropolitan areas on issues including housing segregation,incarceration, poverty and income. On nearly every measure, Milwaukee comes outat or near the bottom. Wisconsin’s largest city, he said, “represents thearchetype of modern-day metropolitan racial apartheid and inequality.”
Differencesin educational achievement do not account for the disparities in income.According to Levine’s report, a white high school dropout is over twice aslikely to be employed in Milwaukee than a Black high school dropout. In fact,white high school dropouts have a higher employment rate than Black workers who have graduated from high school.
“Sowhen we talk about raising the minimum wage and the Fight for 15, you can seehow important that is for Black Milwaukee given the very low wages that areearned by Black males,” Levine told Wisconsin Watch. “My estimate is thatalmost 40 to 45% of Black workers in Milwaukee would benefit from raising theminimum wage to $15 an hour.”
Lack of raise ‘shameful’
ForWisconsin state Sen. Melissa Agard, the issue of raising the minimum wage is amoral one. Far too many people in the state who are working 40 hours a week —and who are disproportionately people of color — are still unable to take careof themselves and their families with dignity, she said.
OnJune 17, Agard announced she would reintroduce legislation to raise the minimumwage to $15 in Wisconsin. She said it is “embarrassing” and “shameful” that theminimum hourly wage in the state has been frozen at $7.25 since 2009.
Manyminimum-wage workers are forced to rely on public assistance programs, whichcost the state billions. Addressing income inequality, in part by raising theminimum wage, could actually save the state money in respect togovernment-funded assistance programs because people would be able to bettersupport themselves and their families, Agard said.
“Increasedwages mean less people (are) reliant on government assistance for food, healthcare and other essentials,” she said. “In the richest country on the planet, noone should work full time and live in poverty.”
The UC Berkeley Labor
Centerfound that 45% of workers in Wisconsin who would receive a pay boost if theRaise the Wage Act were passed are currently enrolled in one or more publicassistance programs, including Medicaid, FoodShare and the Earned Income TaxCredit. Those working class employees are supported by an estimated $2.4billion in public assistance programs in Wisconsin, the Labor Centerestimated.
WisconsinManufacturers and Commerce is a major voice of opposition to raising theminimum wage. The group argues that the biggest issue facing employers is alack of skilled workers, and that the state should focus on training workersand incentivizing young professionals and college graduates to remain in thestate.
Thepowerful business group did not respond to requests for comment. But in itslegislative agenda, WMC stated that “raising the minimum wage will increase thecost of employing entry level workers, resulting in fewer job opportunities forworkers entering the workforce who need to build skills and experience fortheir career.”
Inaddition, the Congressional Budget Office projected that the reduction inemployment would increase spending for programs such as unemploymentcompensation. It also projected the costs of goods and services would increase,leading consumers to limit purchases and employers to reduce their employment.
Afterattempting to push through the bill in 2015 and 2017, the senator invited her Republicancolleagues to join her. “Everyone deserves economic security,” she said.
Higher
tipped wage proposed
AnotherDemocratic-backed proposal in Wisconsin would ensure tipped employees currentlymaking $2.13 or $2.33 an hour are compensated the same minimum wage as the restof the workforce. Sen. Chris Larson of Milwaukee and Rep. Francesca Hong ofMadison are sponsors of the measure.
“Thiswage is simply not enough,” Larson said at a March press conference introducingthe legislation. “Up to 60% of tipped workers report that their tipped wagesare too low to meet unemployment thresholds, and 46% rely on public assistancefor basic survival.”
LarissaJoanna, a restaurant worker and single mother of two, said such a change wouldhave helped her. She described getting paid the sub-minimum wage at her pastrestaurant jobs as dehumanizing. Having to rely so heavily on tips fromcustomers to support her family made her stressed and worried.
Forthe past three years Joanna has worked as a manager at a Madison restaurantthat starts every employee at the $7.25 minimum wage, plus tips. But shecontinues to fight for a higher wage for others because she knows what it’slike to work hard and yet not earn enough to support a family.
Andshe can never make up for lost time with her sons — one of whom has autism,attention deficit hyperactivity disorder and speech delays — while she workedtwo jobs just to make ends meet.
“UnfortunatelyI had to spend that time away from my children, and if we were all makingbetter pay it would be beneficial for everyone as a whole including ourchildren,” Joanna said.
SaidRudd: “Fifteen dollars is just a start. We want to take vacations. We want tobe able to live the American dream.”
Wisconsin
Watch reporters Zhen Wang and Isaac Wasserman contributed to this story, which
was produced as part of an investigative reporting class at the University of
Wisconsin-Madison School of Journalism and Mass Communication under the
direction of Dee J. Hall, Wisconsin Watch’s managing editor. The nonprofit
Wisconsin Watch (www.WisconsinWatch.org) collaborates with
WPR, PBS Wisconsin, other news media and the UW-Madison School of Journalism
and Mass Communication. All works created, published, posted or disseminated by
Wisconsin Watch do not necessarily reflect the views or opinions of UW-Madison
or any of its affiliates.