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Increasing Both the Earned Income Tax Credit and the Minimum Wage Would Strengthen Wisconsin’s Families

7:57 am in Uncategorized by WI Budget Project

From www.wisconsinbudgetproject.org.

State lawmakers who want to help Wisconsin families recover from the recession should move to boost both the state’s earned income tax credit and its minimum wage. Each policy on its own helps make work pay for families struggling on low wages, but improving them at the same time goes further to putting working families on the path to economic security and opportunity, according to a new report from the Center on Budget and Policy Priorities.
Earned Income Tax Credit
Low wages make it hard for working families to afford basics like decent housing in a safe neighborhood, nutritious food, reliable transportation, quality child care, or educational opportunities that put families on a path to greater economic security.

But, state lawmakers have tools that can help address stagnant low wages. One, increase the state Earned Income Tax Credit. Two, raise the state minimum wage and make future increases automatic to keep up with inflation

These policies both are targeted to assist only those who are working, helping them to better afford basic necessities, including the things that allow them to keep working, like car repairs and child care.

Improving both Wisconsin’s EITC and minimum wage will boost the income of low-paid workers and help keep many Wisconsin workers and their families out of poverty. Doing so would reduce the widening gap between the rich and those working in low-wage jobs, which holds our economy back.

Together the EITC and minimum wage do a better job of getting low-income children on a better path. The increase in family income can mean that kids go further in school and have higher future earnings in adulthood.

Both policies mean that low-paid working households can spend a bit more at local businesses – paying for things like gas, groceries, and child care – which is good for the economy.

Boosting the EITC and the minimum wage could help large numbers of workers. In Wisconsin, an increase in the state EITC could help keep taxes low for the more than 250,000 working parents who received the credit. Increasing the minimum wage to $10.10 would give a raise to more than half a million Wisconsin workers, and improve the family incomes of 234,000 children in the state.

Unfortunately, Wisconsin lawmakers give little sign of using either of these policy tools in the near future to improve the earning power of families with low incomes. Raising the minimum wage is not an issue that breaks neatly along party lines; some prominent Republicans, including 2012 Republican presidential candidate Mitt Romney, have voiced support for increasing the wage floor.  But in Wisconsin, Governor Walker called a proposal to raise the state’s minimum wage a “misguided political stunt,” and the legislature hasn’t taken up the issue. Far from improving the state’s EITC, Wisconsin lawmakers made deep cuts to that credit in 2011, increasing the amount of taxes paid by working families with children by $114 million over the last four years.

Together, a bigger EITC and a higher minimum wage can help struggling Wisconsin families make ends meet, boost the state’s economy, and improve children’s chances in life. Wisconsin lawmakers should use these tools to help working families and individuals achieve economic security.
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Housing Costs Out of Reach for Wisconsin Workers Earning Minimum Wage

10:59 am in Uncategorized by WI Budget Project

For more, go to www.wisconsinbudgetproject.org.

NYC Raise the Wage Protest sign: "Fight for a Liveable Wage!"

At minimum wage, many workers can’t afford housing.

A worker in Wisconsin needs to earn more than twice the minimum wage to afford a typically-priced two-bedroom apartment, a new study has found. Wisconsin workers need to earn $14.76 an hour in order to afford the rent for a two-bedroom apartment. The state’s minimum wage is $7.25.

In some cities in Wisconsin, the hourly wage needed to afford a two-bedroom apartment is even higher. For example, in Kenosha, an hourly wage of $18.65 is needed to afford a typically-priced two-bedroom apartment. That means even two minimum-wage workers in Kenosha who work full time the whole year could not rent a two-bedroom apartment without having housing costs exceed 30% of their income. Other metropolitan areas in Wisconsin including Madison, Milwaukee-Waukesha, and Janesville, have housing costs that require an hourly wage that exceeds twice the minimum wage of $7.25/hour.

Unlike housing costs, the minimum wage has been frozen since 2009. That means that as rents go up, workers earning the lowest wages have increasing difficulty making ends meet. Unfortunately, there is little relief in sight — a proposal to raise the minimum wage to $10.10 at the federal level has stalled, and the Wisconsin legislature has shown little interest in passing a long-overdue increase in the minimum wage.

That’s unfortunate, because increasing the minimum wage to $10.10 would have widespread benefits in the state and would give a raise to one out of five Wisconsin workers. The vast majority of people who would get a raise are adults – eight out of ten workers who would be affected in Wisconsin are over the age of 20. Raising the minimum wage would boost the bottom lines of 112,000 Wisconsin parents, helping families work their way to the middle class.

Wisconsin lawmakers haven’t taken action to raise the state’s minimum wage, but our neighbors to the west are taking a different path.  Minnesota lawmakers have approved increasing the minimum wage to $9.50 over three years, and tying future increases to inflation. According to the StarTribune,

State officials estimate that the $9.50 base wage will put an additional $472 million in the pockets of Minnesota’s lowest-wage workers each year. Supporters say the increase in consumer spending is expected to help local businesses in communities across the state, and provide a secondary boost to Minnesota’s economy.

Raising the minimum wage would help workers find affordable housing, lift Wisconsin families out of poverty, and increase the amount of income families have to spend at businesses in the state. It’s high time for an increase in the minimum wage in Wisconsin.

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Wisconsin Legislature Bucking the Tide on Wage Laws

9:59 am in Uncategorized by WI Budget Project

In Contrast to WI, Higher Minimum Wage Has Broad Bipartisan Support in West Virginia

The West Virginia State Capitol Building

More states, like West Virginia, support increases to minimum wage.

State and local policymakers in many parts of the country are coming to the conclusion that too many workers get paid too little, and they are pushing for higher wage standards for workers.  Yet in Wisconsin an Assembly Committee moved with great speed last week to advance legislation blocking county or municipal ordinances that set a minimum wage for contractors doing work financed in part with state or federal dollars.

The new legislation, AB 750, was introduced on Tuesday, Feb. 11, then got a public hearing Wednesday and was voted on in the committee Thursday – just a week after the Milwaukee County Board voted 12 to 6 for an ordinance requiring all contractors to pay at least $11.32 an hour.  That amount was chosen in part because that was the federal poverty level in 2013 for a family of four.

The bill was developed to block implementation of that measure and a Milwaukee County residency ordinance approved almost 20 years, which aims to boost the percentage of workers on public contracts who reside within the county.  AB 750 would also invalidate or significantly restrict similar wage standards approved a number of years ago by Dane County and the City of Madison.  (Read more about the bill and committee amendment in this Legislative Council memo.)

In marked contrast to the developments in the Assembly last week, there is very strong bipartisan support for a higher minimum wage in West Virginia, where the House overwhelmingly voted on February 12th to raise the state’s minimum wage from $7.25 to $8.75 by the start of 2016.  That measure passed 89 to 5, with the support of 38 of the 43 Republican members.

The hostility of conservative Wisconsin legislators to local wage ordinances also contrasts sharply with an unusual and ground-breaking minimum wage increase approved in December in the Washington D.C. metropolitan area.  In a coordinated effort, the Washington city council and local officials in two suburban counties – Montgomery and Prince George’s counties in Maryland – all voted to increase the minimum wage to $11.50 over the next few years.  The three jurisdictions have a combined population of about 2.5 million people.  That sort of regional approach would also be precluded by AB 750.

The author of AB 750, Rep. Kapenga, and other proponents of the bill contend that when state or federal dollars are involved it is unfair to have higher wages in some parts of the state than in others.  However, some areas have higher living costs, and regardless of whether Wisconsin allows local ordinances setting minimums, there will be higher rates of reimbursement and spending in some areas of the state and the nation than others.

Another reason that the arguments for invalidating the local ordinances ring hollow for me is that I think it’s hypocritical for the state to contend there must be statewide uniformity in the minimum level of compensation for employers and contractors when our lawmakers haven’t been attempting to ensure that the state sets a livable minimum wage.

The fate of AB 750 will say a lot about whether state lawmakers are willing to help make work pay for people employed in professions like home health care.  However, it might say even more about the fate of our state’s long tradition of local control.

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Increasing the Minimum Wage Would Help Wisconsin Families

1:41 pm in Uncategorized by WI Budget Project

For more, go to www.wisconsinbudgetproject.org.

NYC Raise the Wage Protest sign: "Fight for a Liveable Wage!"

A minimum wage increase would benefit many working class families.

Raising the minimum wage, a move that has extensive support among Wisconsin residents, would have widespread benefits in the state and would give a raise to one out of five Wisconsin workers.

The benefits of increasing the minimum wage are substantial. A proposal to raise the federal minimum wage to $10.10 an hour would benefit 587,000 Wisconsin workers and give a boost to businesses and the state economy, according to a new report from the Economic Policy Institute.

Some opponents of raising the minimum wage claim that it is mostly teenagers who earn minimum wage. But in Wisconsin, teens make up only 21% of the workers who would benefit from an increase in the minimum wage. The other 79% of workers who would benefit are older workers, many of who are trying to support families. Increasing the minimum wage would also benefit 234,000 Wisconsin children, all of whom have at least one parent who would receive a raise.

Most Wisconsin residents support raising the minimum wage, according to a new poll by Marquette University. Three-quarters of Wisconsin residents support raising the minimum wage, with 40% saying the minimum wage should be increased to $10 an hour or more. The minimum wage is currently set at $7.25.

Opponents of increasing the minimum wage have blocked efforts to raise the floor, both at the state and national levels. However, there have been several successful moves to increase the wage floor for some workers, including:

Raising the minimum wage would help lift many Wisconsin families out of poverty and increase the amount of income those families have to spend at businesses in the state. The last increase was five years ago, and time is long past due for another increase.

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Stuck in a Rut: Wisconsin’s Minimum Wage

2:10 pm in Uncategorized by WI Budget Project

2013 Brings Increases in 12 States

A number of states welcomed in the New Year today with minimum wage increases – thanks to formulas that automatically adjust it for inflation. Washington State leads the way, with the nation’s highest state minimum, which is now $9.19 an hour.

However, Wisconsin is not one of the 12 states where the minimum wage is increasing this year (automatically in 10 of those states), nor is it one of the 19 states that exceed the federal minimum. Our floor on wages remains right where it has been ($7.25 per hour) since the last federal increase took effect in July 2009.

Rep. Cory Mason (D. Racine) would like Wisconsin to join the list of states that regularly adjust the minimum wage. According to an article last week in the Racine Journal Times, Mason plans to reintroduce a bill this year that would increase the minimum to $7.60 per hour and then index it annually for inflation.

“It would go a long way to giving people a little more dignity for their work,” Mason told the Journal Times. “I think it’s a real policy mistake to not have a minimum wage that can get somebody out of poverty.”

Read more in the December 27 article.