Poverty-wage work is widespread in Wisconsin, with 1 in 4 workers earning poverty-level wages, according to a new report from the Center on Wisconsin Strategy. Raising the minimum wage would give these workers a raise, provide a shot in the arm to the local economy, and help create a more inclusive version of economic prosperity.
There is a wealth of information about poverty-wage workers in Wisconsin in the COWS report, but one fact in particular stands out: The typical poverty-wage worker in Wisconsin is 30 years old. (The report defines poverty-wage work as work that pays $11.35 an hour or less, the amount needed to keep a family of four out of poverty with full-time, year-round work.)
Opponents of raising the minimum wage sometimes mischaracterize the issue as a disagreement about how much to pay teenage workers. In one of the gubernatorial debates, Governor Walker recalled working for minimum wage at McDonald’s, but said he knew he would be moving on to better-paying jobs. Read more
TANF Funding Squeeze Creates a Substantial Budget Challenge
The Department of Children and Families (DCF) budget proposes a very large cut in the portion of funding for the Earned Income Tax Credit that comes from the federal welfare reform block grant, which is known as Temporary Assistance for Needy Families (TANF). Specifically, the department’s 2015-17 budget proposes cutting $55.8 million from the TANF funding that gets transferred to the Department of Revenue, which would mean that state General Purpose Revenue (GPR) has to fill the very substantial gap.
Assuming the Walker Administration isn’t planning to cut the EITC, I applaud DCF for wanting to use state funds rather than TANF funds to finance that credit for low-income working families. Unfortunately, the Department of Revenue (DOR) budget proposal doesn’t currently include an increased GPR appropriation for the EITC. Taking both agency proposals together, we have a $55.8 million hole that needs to be filled by state policymakers, and that problem is on top of the other structural budget challenges that have gotten more media attention. Read more
Three Wisconsin electric utilities have proposed billing changes that would raise energy costs for people with low incomes.
We Energies, Madison Gas & Electric, and Wisconsin Public Service Corporation (WPS) have asked the state’s Public Service Commission for permission to change how the utilities bill for electric service. This request has gotten a great deal of news coverage (see here and here) focusing on how the change would make it less cost-effective for customers to install solar systems that generate electricity, and would reduce incentives to be energy efficient.
Mostly missing from the news coverage has been the fact that the changes would shift costs to customers with low incomes. The utilities want to increase the fixed monthly fee charged to customers, while reducing the usage-based kilowatt-hour charge. The result would be higher costs for people who use little electricity, and lower costs for customers who use a lot of electricity. Read more
One in nine households in Wisconsin has difficulty affording food, according to a new report from the U.S Department of Agriculture.
Nearly 12% of Wisconsin households did not have access to enough food for an active, healthy lifestyle over the period 2011 through 2013.That translates into about 270,000 Wisconsin families struggling to put food on the table.
The share of Wisconsin households that have trouble affording food shot up during the recession and hasn’t come back down; a decade ago, only 9% of Wisconsin families lived in food insecurity. That’s the same pattern shown by many other measures of economic well-being for Wisconsin families. For example, poverty rates in Wisconsin also remain stubbornly high, and household income levels don’t show much signs of bouncing back to pre-recession levels either. As a result, many families are continuing to experience the same levels of hardship that they did during the recession – even though some of the temporary supports for families with low incomes that were introduced during the recession have since been eliminated. Read more
Four years into the nation’s recovery from recession, too many Wisconsin families are worse off than they were before the economic collapse of 2008. New Census figures give us an updated picture of poverty in Wisconsin, and what we can do to address it.
Wisconsin’s gradual economic recovery still hasn’t substantially expanded economic opportunity for working people and families. Median incomes are still well below their pre-recession level, and our state’s elevated poverty levels have yet to begin declining.
Increasing Both the Earned Income Tax Credit and the Minimum Wage Would Strengthen Wisconsin’s Families
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.
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. Read more
Women are vastly-overrepresented in jobs that pay low wages, in Wisconsin and across the country, according to a new report from the National Women’s Law Center.
Women’s educational attainment and work experience have increased dramatically in recent decades, but they are still far more likely than men to work at low-wage jobs, which are defined in the report as jobs that pay $10.10 an hour or less. In Wisconsin, 1 in 5 women work in low-wage jobs – adding up to nearly a quarter of a million workers. In contrast, only about 1 in 12 men in Wisconsin work in low wage jobs. Put another way, Wisconsin women are 2.3 times as likely as Wisconsin men to work for low wages.
Many women who work in low-wage jobs are parents, according to the report. Nearly one-third of women nationally who work at low-wage jobs are mothers, and nearly half of these mothers are single. Read more
Paul Ryan has a released a new poverty plan that advocates consolidating federal safety net programs and turning the money over to the states. It’s always worth taking a look at changes that could make anti-poverty program more effective, but Ryan’s approach would decrease opportunity for individuals living in poverty, not increase it.
Ryan frames his new proposal as aimed at giving low-income people the tools they need to make ends meet and lift themselves out of poverty. According to his proposal, Expanding Opportunity in America:
“A key tenet of the American Dream is that where you start off shouldn’t determine where you end up. If you work hard and play by the rules, you should get ahead. But the fact is, far too many people are stuck on the lower rungs…There are many factors beyond public policy that affect upward mobility. But public policy is still a factor, and government has a role to play in providing a safety net and expanding opportunity for all.”
Ryan believes that a fundamental redesign of how federal anti-poverty programs deliver services can help expand opportunity across the board. Read more
The minimum wage has lost about 11% of its purchasing power due to inflation since 2009, making it harder for low-paid workers to make ends meet. (In comparison, CEO compensation rose 46% between 2009 and 2013.)
Some states have increased their own minimum wages, rather than waiting for Congress to do it. Nineteen states have set their own minimum wage higher than the federal minimum wage, including our neighboring states of Illinois ($8.35) and Michigan ($7.40), where a Republican-controlled legislature recently approved a wage increase to $9.25 by 2018. In Minnesota, the minimum wage is scheduled to rise to $9.50 by 2016. In contrast, state lawmakers in Wisconsin have taken no action to increase the minimum wage.
It’s too bad that Wisconsin lawmakers have refused to raise the minimum wage, because such a move would have broad-based benefits for workers. Read more