Statement to the Joint Committee on Administrative Rules Regarding the Minimum Wage - September 23, 2004

Mona Steele, Public Policy co-chair of the Wisconsin Women’s Network, prepared the following testimony in support of the proposed increase in the minimum wage recommended by the Governor’s Minimum Wage Advisory Council.

In April 2004, the WWN published The Self-Sufficiency Standard for Wisconsin. This was the second effort for the WWN; the first report was published in 2000. The Self-Sufficiency Standard (the Standard) for Wisconsin calculates how much income working adults need to meet their basic needs and those of their families. The Standard is calculated without subsidies of any kind and includes the costs of housing, food, transportation, child care, health care and taxes. The Standard takes into consideration the number of household members and ages of the children. It is geographically specific for each metropolitan area and non- metropolitan area in Wisconsin.

The Standard offers a consistent methodology that is drawn from reliable public government data. These sources include the U.S. Bureau of the Census, U.S. Department of Housing and Urban Development, U.S. Department of Agriculture, federally mandated state market surveys of child care costs and national consumer price surveys. We believe the Standard is a real measure of how much it costs for a family to become self-sufficient, and the understanding of it would be a first step in closing the gap between what low-income families have and what they need. We believe that a realistic measure which reflects the actual cost of living, as defined by a tool like the Standard, will increase the likelihood that state and federal programs affecting low-income families will be structured to increase economic security. A second step would be increasing the minimum wage.

In many parts of the country, including Wisconsin, low-wage work, often at minimum wage, does not pay self-sufficiency wages. In fact, there are huge gaps between the income families must have to meet their basic needs, the wages available to them, and the availability and accessibility of supports. This gap between wages and needs presents policymakers with a challenge: how to aid families who are striving for self-sufficiency, a goal that is stated in legislation on welfare, job training and vocational education. The two basic approaches to address these gaps are to raise the income of low-income families and/or to reduce their costs through public or private assistance.

Before you today is the opportunity to raise the income of low-income working families by raising the minimum wage. We offer several points for your consideration. We all know that the value of the minimum wage (either federal or state) has declined and the impact of the last minimum wage increase in 1997 has been completely eroded by inflation. We believe the floor must be raised on the value of hard work in our economy. Raising the minimum wage would go a long way toward helping all low-income working families achieve economic security.

Wisconsin would not be alone in positioning itself to raise this economic reimbursement measure. Already, 11 other states have already raised the minimum wage, with the highest being the state of Washington at $7.16 per hour. Our neighboring state of Illinois is among this group. Add to this fact that there are current proposals to increase the federal minimum wage to $6.65 an hour, which would add $3,000 to the income of full-time, year round workers at today’s federal minimum wage of $5.15 per hour. This federal proposal is higher than the proposal from the Governor’s Minimum Wage Advisory Council compromise.

A recent national study by Wider Opportunities for Women, Coming Up Short, found that on average, a working family of three could only cover 34% of their basic needs by working full time at minimum wage. In Wisconsin, a full time job at the minimum wage provides under one-half, (from 30% to 44%) of the amount needed to be self-sufficient. And minimum wage jobs remain below the federal poverty level, a measure that does not take into account geographical location or composition of the family and has long been discounted as an adequate measure of support for a family.

We ask that you consider these facts and raise Wisconsin’s minimum wage to help close the gap between what families truly need as shown in the Self Sufficiency Standard and what they earn in minimum wage or low wage jobs.

In closing, we’d like to mention other ways to help struggling working families. One would be to expand education and job training opportunities, and another would be to make work supports accessible and available to help people meet their basic costs of living. Along with a raise in the minimum wage, these programs are vital to helping low-income working families in Wisconsin move toward the goal of Self-Sufficiency.

The Joint Committee for the Review of Administrative Rules voted to block implementation of the Dept. of Workforce Development rule to raise the state's minimum wage to $6.50 by October 2005. A bill must be passed in the next legislative session to uphold this action. Prior to this, the Senate Labor Committee voted to object to the proposal to increase the minimum wage. For more information: WI Dept. of Workforce Development

The Self-Sufficiency Standard for Wisconsin may be downloaded at www.wiwomensnetwork.org. Hard copies of the report are available for $10 (includes postage and handling) through the WWN office.