March 28. 2013 10:44AM

Minimum wage debate reaches Milwaukee

By Erica Breunlin

A roundtable discussion hosted Wednesday by Acting U.S. Secretary of Labor Seth Harris at Hunger Task Force’s office exposed the day-to-day struggles of Milwaukeeans working to support themselves and their families on minimum wage – struggles in paying bills, funding transportation, covering rent and affording prescriptions among other necessities.

Harris’ stop in Milwaukee was part of a national tour focused on learning how an increase in minimum wage would impact workers and their families, in line with President Barack Obama’s proposal to raise minimum wage rates across the country.

“I want the people of Milwaukee and the people of Wisconsin to hear the stories of their neighbors who earn the minimum wage, and I want them to understand what a struggle it is to get by on $8 or $7.75 an hour and to understand how important it is to support the president’s proposal to raise the minimum wage,” Harris told BizTimes.

One low-wage worker at the table Wednesday shared that after 30 years at the same job, he currently makes $8 per hour. Another participant opened up about having less than $100 to live on each month after paying rent, utilities and bus fare, according to Maureen Fitzgerald, director of advocacy at Hunger Task Force.

“It really brings home how people are struggling and what an increase in the minimum wage would mean,” Fitzgerald said.

While Hunger Task Force has not taken a position on the proposed minimum wage hike, the nonprofit organization believes that full-time work opportunities with living wages must be available for people in order to fulfill its mission of ending future hunger, Fitzgerald said.

Wisconsin’s current minimum wage rate stands at $7.25 per hour, reflecting the federal minimum wage rate, which went into effect in July 2009.

Although Obama has not drafted specific legislation, he has proposed raising the federal rate to $9 per hour. This proposal supports his approach to growing the economy from the middle class out rather than from the top down, Harris said.

Approximately 312,000 workers in Wisconsin would benefit from an increase in minimum wage and 15 million Americans would benefit overall, according to Harris. Many of them are working families and women who would pump their added dollars into local businesses, Harris said.

“It helps their communities and the businesses in their communities and in that way it helps our larger economy to grow,” Harris said.

Critics of the proposal warn that increasing minimum wage rates could cost jobs.

“It’s simple economics that when you make something more expensive people can afford less of it, and if you want to make employing a worker more expensive to a business owner you run the risk of that business owner employing fewer (workers),” said Steve Baas, vice president of governmental affairs at the Metropolitan Milwaukee Association of Commerce.

Higher wages only help people – and the economy – if jobs are available, Baas said, and boosting minimum wage rates could decrease opportunities for people to enter the workforce.

“I would not deny that this proposal is being done with the best of intentions,” Baas said. “I think within the dynamic of the marketplace, however, we have to be very careful about unintended consequences that may have a more negative impact on workers – particularly low-skilled or entry level workers – than it would a positive impact.”

Other critics argue that an increase in minimum wage would benefit mostly teenagers and lead to frivolous spending on the part of minimum wage workers.

Harris insists that only one in five workers who would benefit from the increase is a teenager. And after hearing the “poignant and powerful” stories of those trying to get by on minimum wage throughout the country, he’s confident dollars would be allocated wisely.

“I know that the money they will get from this minimum wage increase will go right into paying bills and buying necessities for their families,” Harris said.

Greater attention needs to be placed on the skills shortage plaguing both Wisconsin and the country, according to Baas.

He would prefer to raise the minimum skills rate over the minimum wage rate.

“Right now employers are willing to pay pretty generously for somebody who is a skilled worker, and I think that investments in raising the skill level of people coming out of school and coming into our workforce in the long run is probably a bigger benefit to the economy than an increase in a government-mandated wage,” Baas said.

Erica Breunlin is a reporter at BizTimes.