States Leading Way To Boost Minimum Pay
Federal rate of $5.15 unchanged since 1997
 
By Tim Jones
Chicago Tribune, 6/4/06
 
Amanda Phillipi got a big raise last week--to $6.50 an hour.

That's not nearly enough for the 23-year-old single mom in tiny Melrose, Wis., to raise her two young daughters or to live on her own, but it's better than the $5.70 hourly rate--the former minimum wage in Wisconsin--that she was paid when the week started.

Phillipi, part of the mostly forgotten sliver of the American workforce that earns around the bare minimum in wages, is a beneficiary of a remarkable amount of state-by-state activity aimed at boosting the incomes of the nation's lowest-paid workers.

Wisconsin raised its minimum wage by 14 percent on Thursday. Twelve more states will increase the minimum hourly rate between now and Jan. 1. California's Legislature last week approved automatic annual increases, linked to inflation, over the objections of Gov. Arnold Schwarzenegger. Massachusetts is poised to enact the highest minimum wage in the nation, $8.25 an hour.

Possible votes in 6 states

Up to six states, including Ohio and Missouri, could put proposals for raising the minimum wage on their November ballots. Individual cities, including Washington and San Francisco, have enacted minimum wage laws and Chicago is considering a law requiring so-called big box retailers such as Wal-Mart to pay at least $10 an hour, plus $3 an hour in benefits.

The backdrop to this activity is congressional paralysis--the federal minimum wage of $5.15 an hour has not changed since 1997. Federal inaction has helped propel an unusual and bipartisan effort at the state level to raise the minimum wage, which studies show is at its lowest point in purchasing power in nearly a half-century.

And there seems to be growing evidence that political Washington is out of sync with state legislatures and public opinion.

"There's a huge gap between what most Americans think is a reasonable minimum wage and what the wage actually is," said Jen Kern, director of the living wage resource center for ACORN, a nationwide community activist group that has been pushing for minimum-wage increases.

Recent public opinion polls support that statement. An April survey from the Pew Research Center for the People & the Press found that 83 percent of the American public favors raising the federal minimum wage to $7.15, a rate matched or exceeded in only six states. While the idea is more popular among Democrats--91 percent support a $2 boost--72 percent of Republicans backed it, the survey reported.

"It doesn't seem reasonable--to conservatives or liberals--that someone could work year-round and make only $10,000 or $11,000," said Laura Dresser, associate director of the Center on Wisconsin Strategy, at the University of Wisconsin-Madison.

Even with last Thursday's wage increase, Phillipi knows this is only a financial bandage. She's doing carpentry work for a government-funded program that builds houses for low-income people. Phillipi and her daughters, ages 9 and 5, are living with her mother, a nursing assistant who makes $10.75 an hour.

"This will enable me to pay the rent and some bills on time, and do some special things with my daughters, like swimming, or taking them fishing or camping," Phillipi said.

Her plan is to return to college in the fall and--while working another minimum wage job--complete her course work in two years.

"I'm very grateful, but I don't see this as a long-term solution," Phillipi said.

The case against raising the minimum wage has always argued higher salaries will hurt small businesses and ultimately eliminate jobs. A recent report from the Wisconsin Department of Workforce Development said last year's increase in the state's hourly rate--to $5.70 from $5.15--produced $175 million in additional payroll and a $3 million boost in state tax revenue. A spokeswoman said the state did not suffer job losses from the higher standard.

Economic opposition, though, seems to have lost the battle to public opinion. Voters in Florida overwhelming approved a minimum wage increase, indexed to annual cost of living changes, in November 2004. The measure passed with 71 percent support. The margin of that vote, in a state that President Bush carried with 52 percent of the vote, convinced advocates of a higher wage that the public would embrace an increase, regardless of politics.

The realm of minimum wage workers is not large, and in recent years it has been shrinking. The Bureau of Labor Statistics estimates that 3 percent of the hourly workforce, or about 2 million workers, earn the federal minimum wage of $5.15 or less. Raising the wage, though, could affect millions more, say economists who liken it to trickle-up economics--putting pressure on the lower wage scale and establishing a stronger foundation for low-wage workers.

A recent report in Ohio predicted 720,000 workers would be directly or indirectly affected by raising the minimum wage to $6.85 an hour, from $5.15.

Last week's boost in Wisconsin, which state officials say will help 50,000 to 60,000 workers, is not much help for Shirley Fedie of Eau Claire. Fedie, a divorced 57-year-old who in February was laid off from her $11.25 per hour job at a group home, said she feels like she's starting over. Shortly before she got laid off, Fedie was diagnosed with glaucoma.

Last week Fedie completed cashier training for a local grocery store. She started work Friday at $7 per hour, with no benefits.

20 hours, no benefits

"I'm starting at 20 hours a week, and they said I could get more, but it will only be part time. And there won't be benefits," said Fedie, who is too young to qualify for Medicare, the federal health insurance program.

"I have no insurance. So what do you do? Do you run up a bill or do you go blind?" Fedie asked.

Supporters of increasing the minimum wage, like Paul Sonn, deputy director of the poverty program at New York University's Brennan Center for Justice, said minimum wage ballot issues could generate voter turnout in November, much like proposed gay marriage bans did in 2004.

"The higher wage makes me feel like things are moving up, that things are getting better," said Stephanie Kuohujoki, 32, of Eau Claire, who has stopped working and is relying on her husband's income because the couple can't afford day care for their 5-year-old daughter.

"I'm stuck in a cycle until I can get my [college] degree," she said. "I've worked minimum wage jobs since I was 18 years old, and believe me, you can't live on this. It's hard to get out of it."

Copyright (c) 2006 Chicago Tribune
 
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