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The Honolulu Advertiser
Posted on: Monday, June 26, 2006

States bump up minimum wage

By Tim Jones
Chicago Tribune

CHICAGO Amanda Phillipi recently got a big raise to $6.50 an hour.

That's not nearly enough for the 23-year-old single mom in Melrose, Wis., to raise her two young daughters or to live on her own, but it's better than the $5.70 hourly rate the former minimum wage in Wisconsin she was paid before.

Phillipi, part of the mostly forgotten sliver of the American workforce that earns around the bare minimum in wages, is a beneficiary of a remarkable amount of state-by-state activity aimed at boosting the incomes of the nation's lowest-paid workers.

Wisconsin raised its minimum wage by 14 percent on June 1. Twelve more states will increase the minimum hourly rate between now and Jan. 1.

In Hawai'i, the minimum wage is $6.75 per hour. It increases to $7.25 on Jan. 1.

California's Legislature has approved automatic annual increases, linked to inflation, over the objections of Gov. Arnold Schwarzenegger. Massachusetts is poised to enact the highest minimum wage in the nation, $8.25 an hour.

Up to six states, including Ohio and Missouri, could put proposals for raising the minimum wage on their November ballots. Individual cities, including Washington, D.C., and San Francisco, have enacted minimum wage laws and Chicago is considering a law requiring so-called big box retailers such as Wal-Mart to pay at least $10 an hour, plus $3 an hour in benefits.

The backdrop to this activity is congressional paralysis the federal minimum wage of $5.15 an hour has not changed since 1997. Federal inaction has helped propel a bipartisan effort at the state level to raise the minimum wage, which studies show is at its lowest point in purchasing power in nearly a half-century.

And there seems to be growing evidence that political Washington is out of sync with state legislatures and public opinion.

"There's a huge gap between what most Americans think is a reasonable minimum wage and what the wage actually is," said Jen Kern, director of the living wage resource center for ACORN, a community activist group that has been pushing for minimum-wage increases.

Recent public opinion polls support that statement. An April survey from the Pew Research Center for the People & the Press found that 83 percent of the American public favors raising the federal minimum wage to $7.15, a rate matched or exceeded in only six states. While the idea is more popular among Democrats 91 percent support a $2 boost 72 percent of Republicans backed it, the survey reported.

"It doesn't seem reasonable to conservatives or liberals that someone could work year-round and make only $10,000 or $11,000," said Laura Dresser, associate director of the Center on Wisconsin Strategy, at the University of Wisconsin-Madison.

Even with the wage increase, Phillipi knows this is only a financial Band-Aid. She's doing carpentry work for a government-financed program that builds houses for low-income people. Phillipi and her daughters, ages 9 and 5, are living with her mother, a nursing assistant who makes $10.75 an hour.

"This will enable me to pay the rent and some bills on time, and do some special things with my daughters, like swimming, or taking them fishing or camping," Phillipi said.

Her plan is to return to college in the fall and while working another minimum-wage job complete her course work in two years.

"I'm very grateful, but I don't see this as a long-term solution," Phillipi said.

The case against raising the minimum wage has always argued higher salaries will hurt small businesses and ultimately eliminate jobs. A recent report from the Wisconsin Department of Workforce Development said last year's increase in the state's hourly rate to $5.70 from $5.15 produced $175 million in additional payroll and a $3 million boost in state tax revenue. A spokeswoman said the state did not suffer job losses from the higher standard.

Economic opposition, though, seems to have lost the battle to public opinion. Voters in Florida approved a minimum wage increase indexed to annual cost of living changes in November 2004. The measure passed with 71 percent support. The margin of that vote, in a state that President Bush carried with 52 percent of the vote, convinced advocates of a higher wage that the public would embrace an increase, regardless of politics.

The realm of minimum wage workers is not large, and in recent years it has been shrinking. The Bureau of Labor Statistics now estimates that 3 percent of the hourly workforce, or about 2 million workers, earn the federal minimum wage of $5.15 or less. Raising the wage, though, could affect millions more, say economists who believe it will put pressure on the lower wage scale and establish a stronger foundation for low-wage workers.

A recent report in Ohio predicted 720,000 workers would be directly or indirectly affected by raising the minimum wage to $6.85 an hour, from $5.15.

"The higher wage makes me feel like things are moving up, that things are getting better," said Stephanie Kuohujoki, 32, of Eau Claire, Wis., who has stopped working and is relying on her husband's income because the couple can't afford daycare for their 5-year-old daughter.

"I'm stuck in a cycle until I can get my (college) degree," she said. "I've worked minimum-wage jobs since I was 18 years old, and believe me, you can't live on this. It's hard to get out of it."