Lawmakers at the state and federal have introduced multiple proposals to increase the minimum wage, but they have not gained momentum. Wisconsin’s minimum wage — $7.25 per hour — has not increased since 2009.
Image By: Taylor Wolfram
Lawmakers at the state and federal have introduced multiple proposals to increase the minimum wage, but they have not gained momentum. Wisconsin’s minimum wage — $7.25 per hour — has not increased since 2009.
Image By: Taylor WolframIn March, Democratic lawmakers in Wisconsin introduced an “Economic Justice Bill of Rights for All Wisconsinites,” which, among other provisions, includes an “equitable, living-income and livelihood.”
The bill of rights, proposed by Rep. Francesca Hong, D-Madison, and Rep. Kristina Shelton, D-Green Bay, makes note of the “crises of our time” and includes provisions like affordable health care and high-quality housing.
“Working people and their families are the backbone of Wisconsin’s economy and progressive history. Over and over again, working Wisconsinites have sacrificed more than their fair share. This has been especially true during the COVID pandemic as workers’ income drastically dropped as the nation’s millionaires and billionaires made record profits,” Shelton said when announcing the proposal.
Hong said that the bill of rights is “what the people of Wisconsin deserve.” Sen. Melissa Agard, D-Madison, said the bill of rights “creates a road map and a vision for the future of the state.”
The Economic Justice Bill of Rights isn’t the only proposal calling for a living wage. Wisconsin’s minimum wage still stands at $7.25 — the same level as the federal minimum wage, which has not changed since 2009.
Gov. Tony Evers’ biennial budget, released last month, called for a phased increase to the state minimum wage, as well as a task force to study options for a $15 minimum wage.
By the effective date of the budget bill, the minimum wage would increase to $8.60. On or after the start of 2023 and 2024, the wage would increase to $9.40 and $10.15, followed by changes that reflect the consumer price index for each year after 2024.
However, the proposal is unlikely to gain traction in the Republican-controlled legislature, which plans to draft their own budget.
During the latest round of federal COVID-19 relief legislation in early March, the Senate rejected a measure sponsored by Sen. Bernie Sanders that would increase the federal minimum wage to $15 by 2025.
Senate Majority Leader Chuck Schumer pledged to pursue other legislation to increase the minimum wage after the Senate parliamentarian ruled that a proposal to increase the minimum wage did not fit in the rules for budget bills in the Senate, according to NPR.
Where does Wisconsin stand?
A new report from the Center on Wisconsin Strategy, a UW-Madison-based think tank, found that raising the minimum wage to $15 per hour by 2025 would raise the earnings of 30 percent of Wisconsin’s workers. It would also increase earnings for half of Black workers and over half of Hispanic workers.
Some other states automatically increase their rates based on the cost of living, and some states increase their rates based on approved legislation or ballot initiatives. In 2020, voters in Florida approved Amendment 2, which will raise the state minimum wage to $15 per hour by 2026.
Some localities — more than 40 across the country — have increased wages without the direction of state governments, according to the report. But in Wisconsin, state law prohibits cities from pursuing wage increases.
In Madison, the living wage for an adult with no children is $15.51, and $29.05 for two adults and one child, according to the MIT living wage calculator, which defines the living wage as the hourly rate that an individual must make to support themself or their family.
For Wisconsin overall, MIT measures the living wage for an adult with no children at $14.02 and for two adults and one child at $27.26.
What would an increase mean for workers and businesses?
A UW-Madison student who works in dining said that her current pay can cover about a quarter of her housing costs but not much else. She also said that she lost their internship due to the pandemic, which would have paid $16.50 per hour for 40 hours per week.
“I know I’m not alone in this. I know a bunch of my friends who lost similar opportunities, and no matter how much money our parents are making, if we were planning to put that towards university, it’s like, ‘Oh no, I guess you’re $8,000 shorter than you thought you would be, have fun with that!’” she said.
She said that she supports a $15 minimum wage, which wouldn’t cover school but would bridge the gap between what she currently makes.
“The original concept behind minimum wage is that it would be enough to feed a family comfortably. But that’s not how our current minimum wage is functioning at all,” she said.
In spring 2020, the university increased the minimum wage for hourly employees to $15 per hour, which primarily affected workers in custodial, animal care or food-service positions. While no positions in University Housing start lower than $10 per hour, the raise did not apply to temporary or student employees..
Many students also work in food service jobs that pay based on the tipped minimum wage. In Wisconsin, an employer must pay between $2.13 and $2.33 per hour in wages, depending on the worker’s age and length of employment. If an employee’s tips combined with the wages do not equal $7.25, employers must make up the difference.
Wisconsin has the lowest tipped minimum wage out of the states it borders. Michigan’s tipped minimum wage is $3.67 per hour, and Illinois has a $6.60 tipped minimum wage.
Last week, Sen. Chris Larson, D-Milwaukee, and Rep. Hong, who is a restaurant owner, announced legislation to repeal the tipped minimum wage and pay tipped workers the same minimum wage as other employees. Hong said that an increase in the wage would also benefit local economies while also empowering restaurant workers.
“Up to 60 percent of tipped workers report that their wages are too low to meet unemployment benefits thresholds. Tipped workers have a poverty rate of 12.8 percent and 46 percent rely on public benefits for basic survival,” Larson said. “If this is going to be the minimum, it needs to be higher. It cannot be a poverty wage.”
Restaurant Workers Coalition co-founder Larissa Joanna said the low wage is “a little bit dehumanizing” for people who put passion into working in restaurants, especially during the pandemic.
Madison restaurant operator Josh Berkson said that the pandemic exposed unsustainable business models in the industry. When both of his restaurants moved to curbside and delivery models, all employees became customer-facing and the “tip credit [had] no value at all.” The company developed a new compensation program that shares tips and allows employees to make $15 to $21 per hour.
Becky Cooper, owner of Bounce Milwaukee, said her and her husband decided to pay above the tipped minimum wage and the standard medium wage even though employees would get tips.
“This was based in a sense of doing the right thing for our employees and our community,” Cooper said. “We knew we were employing people who have families, for whom this would be a regular job. These are real jobs to support real people.”
Cooper said she and her husband have talked to other business owners who are interested in paying above the tipped minimum wage. She said if all restaurants raise the wage, it will “level the playing field” between restaurants.
Still, some businesses are worried about the impact of raising the minimum wage. Wisconsin Manufacturers and Commerce, which represents business interests in the state, does not support any of the proposed increases, according to WPR.
Small business owners like Dave and Sandy Freeman, who own Hub City Ice Cream Company in Marshfield, said they want to see an increase in the minimum wage. But, they worry that an increase to $15 per hour would affect their small business, which employs about 10 to 15 high school and college students.
“It definitely would affect our business on the amount of employees that we could hire- it would also increase the cost of goods to our customers, which may limit the amount of customers we have, too,” Sandy Freeman said.
Freeman said Evers’ proposal is “a little bit more doable” because it goes up in increments. She noted that small businesses in small towns would have a more difficult time than larger stores.
“I do agree that they need to increase the minimum wage with some kind of stepped program,” Freeman said. “But, if there is some type of incentive that could help small businesses, to reduce some type of tax burden on them, that would probably be helpful.”