MINIMUM WAGE
On June 1st, 2005, the minimum wage in Wisconsin will be increased from $5.15 an hour to $5.70 an hour. This is the first of 2 scheduled raises; the second will raise the minimum wage to $6.50 one year later. This is the first increase in the minimum wage since 1997. The state Department of Workforce Development (DWD) estimates that over 200,000 workers will benefit from this higher wage.
The increase is the result of an ''emergency rule.'' The DWD found that the buying power of the state minimum wage was at a low enough level to constitute an emergency situation. According to the department, ''when wages are so low that workers and their families can't afford their most basic needs, society, particularly taxpayers, bears tremendous costs due to poverty-related educational failure, workforce failure, and citizenship failure.''
As part of a legislative compromise, Governor Doyle has agreed to consider putting a stop to local minimum wage increases, making the new state minimum wage the gold standard.
Inflation has eliminated all of the buying power of the 1997 raise, which brought the minimum wage from $4.25 to $5.15 an hour. While the new wage increase is an important step forward, we are still behind the curve compared to 25 years ago. If the minimum wage had kept pace with inflation since 1979, it would be over $7.80 today.
This wage hike will benefit residents of Wisconsin in several ways. First, it will allow those who work a full-time work year in Wisconsin to live above the federal poverty standard. In 2004, the yearly wage, after subtracting taxes, vacation time, and sick days, falls below the poverty level. This increase keeps pace with inflation and keeps Wisconsin workers above the poverty line.
Public supporters of the minimum wage increase include the Wisconsin Restaurant Association, the Wisconsin Merchants Federation, the Wisconsin chapter of the National Federation of Independent Business, the Wisconsin Grocers Association, and Wisconsin Manufacturers & Commerce, all of whom are heavily involved with the well-being of Wisconsin's low-income workers.
Critics of the hike say that this action will lead to job loss for low income workers, but this has proved to be historically inaccurate. Employment growth rates actually went up in the year following the 1997 minimum wage increase, as a result of more robust local economies, resulting from putting more Wisconsin citizens over the poverty line. According to the DWD, the increase will cost state businesses an estimated $175 million, nearly all of which will be re-circulated into their local economies through purchases of food, housing, and other necessities.
Increased earnings for low-wage workers will also have other added benefits for the state, such as decreased demand for state funded programs such as Medicaid, subsidized housing and child care.
The general minimum wage is not the only change taking effect on June 1st. The minimum wage for minors, which was previously the same as the general minimum wage, will be going up to $5.30 an hour. Minimum wages for camp counselors, golf caddies, and agricultural workers are also seeing substantial increases.
The wage increase will affect a surprising array of people. Fifty seven percent of those benefiting from the plan will be women, and the majority will be over the age of 18.
''The biggest myth about the minimum wage that opponents always tell is that only teenagers flipping burgers in the summer make the minimum wage,'' AFL-CIO Secretary-Treasurer Phil Neuenfeldt said in a recent press release. ''The sad truth is that 68 percent of the workers who would benefit from an increase in the minimum wage are adults and about 40 percent of them provide the sole income for their family.''
comments and inquiries are to:
lindac@wisdems.org
AND
busybeaver@earthlink.net
By Linda Chappetto
On June 1st, 2005, the minimum wage in Wisconsin will be increased from $5.15 an hour to $5.70 an hour. This is the first of 2 scheduled raises; the second will raise the minimum wage to $6.50 one year later. This is the first increase in the minimum wage since 1997. The state Department of Workforce Development (DWD) estimates that over 200,000 workers will benefit from this higher wage.
The increase is the result of an ''emergency rule.'' The DWD found that the buying power of the state minimum wage was at a low enough level to constitute an emergency situation. According to the department, ''when wages are so low that workers and their families can't afford their most basic needs, society, particularly taxpayers, bears tremendous costs due to poverty-related educational failure, workforce failure, and citizenship failure.''
As part of a legislative compromise, Governor Doyle has agreed to consider putting a stop to local minimum wage increases, making the new state minimum wage the gold standard.
Inflation has eliminated all of the buying power of the 1997 raise, which brought the minimum wage from $4.25 to $5.15 an hour. While the new wage increase is an important step forward, we are still behind the curve compared to 25 years ago. If the minimum wage had kept pace with inflation since 1979, it would be over $7.80 today.
This wage hike will benefit residents of Wisconsin in several ways. First, it will allow those who work a full-time work year in Wisconsin to live above the federal poverty standard. In 2004, the yearly wage, after subtracting taxes, vacation time, and sick days, falls below the poverty level. This increase keeps pace with inflation and keeps Wisconsin workers above the poverty line.
Public supporters of the minimum wage increase include the Wisconsin Restaurant Association, the Wisconsin Merchants Federation, the Wisconsin chapter of the National Federation of Independent Business, the Wisconsin Grocers Association, and Wisconsin Manufacturers & Commerce, all of whom are heavily involved with the well-being of Wisconsin's low-income workers.
Critics of the hike say that this action will lead to job loss for low income workers, but this has proved to be historically inaccurate. Employment growth rates actually went up in the year following the 1997 minimum wage increase, as a result of more robust local economies, resulting from putting more Wisconsin citizens over the poverty line. According to the DWD, the increase will cost state businesses an estimated $175 million, nearly all of which will be re-circulated into their local economies through purchases of food, housing, and other necessities.
Increased earnings for low-wage workers will also have other added benefits for the state, such as decreased demand for state funded programs such as Medicaid, subsidized housing and child care.
The general minimum wage is not the only change taking effect on June 1st. The minimum wage for minors, which was previously the same as the general minimum wage, will be going up to $5.30 an hour. Minimum wages for camp counselors, golf caddies, and agricultural workers are also seeing substantial increases.
The wage increase will affect a surprising array of people. Fifty seven percent of those benefiting from the plan will be women, and the majority will be over the age of 18.
''The biggest myth about the minimum wage that opponents always tell is that only teenagers flipping burgers in the summer make the minimum wage,'' AFL-CIO Secretary-Treasurer Phil Neuenfeldt said in a recent press release. ''The sad truth is that 68 percent of the workers who would benefit from an increase in the minimum wage are adults and about 40 percent of them provide the sole income for their family.''
comments and inquiries are to:
lindac@wisdems.org
AND
busybeaver@earthlink.net
By Linda Chappetto
