By James A. Buchen
Vice President Government Relations The bidding has commenced. Now it’s time to ban local minimum wage laws before the city councils of our state succumb to the easy politics of giving people more money without having to raise taxes. It’s just too tempting when you’re giving away other people’s money. First Madison passed its own minimum wage law, which will increase to $7.75 an hour by 2008. That law is being challenged in court because the city overstepped its legal authority. In short: It’s illegal because cities can’t pass wage laws. The judge has yet to issue her final ruling. Now Milwaukee has entered the bidding war with Ald. Tony Zielenski and Mayor Tom Barrett supporting a proposal that would take the minimum wage up to $6.50 an hour. As the Milwaukee Journal Sentinel said, “cities acting on their own on this matter is not a healthy turn of events.” Barrett and Zielenski both said they think the minimum wage should be set by the state, not local governments. Governor Doyle had proposed a $6.50 state minimum wage, but he vetoed a bill to ban local minimum wage laws and thus set off the bidding war. The solution is simple, and seems to be drawing bi-partisan support at the Capitol: - Increase the minimum wage statewide to $6.50 an hour as recommended by the Minimum Wage Council.
- Pass a permanent ban on local minimum wage and benefit laws.
These two simple ideas need to be linked into one bill so the Legislature can pass it quickly and get Doyle to sign it before the local bidding wars over wages goes into high gear. Senator Robert Jauch (D-Poplar) has proposed such a plan, and various Republican legislators are working on similar proposals. Make no mistake about it, raising the minimum wage is bad public policy. It’s simplistic, feel-good economic policy that shuts out entry level workers from the marketplace and drives up wages without any corresponding increases in productivity. But, we are confronted with a crisis that needs swift resolution. We simply cannot allow our state to become a hodge-podge quilt of minimum wage laws. In Madison, a coalition of business groups, including WMC, has asked the judge to throw out the city’s minimum wage law. We argue that it’s already illegal. But, if we need to pass a law to make it explicitly illegal for cities to enact wage laws, then let’s get out the word processor and start typing. Can you imagine what will happen if another city passes a minimum wage that is higher than Madison’s? The Madison City Council might go into special session to raise its minimum wage. The Madison Council will ponder long and hard, and then decide that Madison is more “compassionate” than most of the state, and therefore, must have the highest minimum wage in Wisconsin. But it won’t stop there. How about $25 an hour, with fully paid health insurance benefits, a pension, fully funded day care, and a company car? Sounds crazy, but what’s the logical limit for a politician deciding what someone else must pay their employees. Then, what’s to keep Milwaukee from countering with $35 an hour. Not to be outdone, Waukesha, Appleton, Oshkosh, La Crosse, Kenosha, Beloit, Green Bay and Superior could convene their own wage and hour experts to develop a mandated wage and benefit plan for all workers in their towns. It may seem far-fetched today. But, if we don’t pass a ban on local minimum wage laws, there will be no end in sight to the pressure put on politicians to force businesses to pay more and more and more. They won’t be able to resist. And, Wisconsin will cement a reputation as a bad place to do business. As Senator Jauch said, “Without this legislation, additional lawsuits will be filed, confusion will spread and fragmented wage policies will create economic uncertainty for workers and business in this state.” Wisconsin should pass a statewide minimum wage increase, and permanently ban local wage and benefit laws. ###
Posted: January 12, 2005
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