Milwaukee Common Council votes to increase minimum wage for city, contract workers

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The Milwaukee Common Council on July 22 adopted an ordinance raising the minimum wage for city employees and city contract employees to $10.10 per hour.

The Milwaukee Common Council on July 22 adopted an ordinance raising the minimum wage for city employees and city contract employees to $10.10 per hour.

The rate will increase to $10.80 per hour on March 1, 2015.

Ald. Ashanti Hamilton, chair of the council's judiciary and legislation committee and the primary sponsor of the ordinance, said in a statement, that the old minimum of $9.51 per hour was at the poverty guideline for a family of three.

"Approving this 'living wage ordinance,' as it has been called, was the right thing to do," Hamilton said. "The council and the city are taking a proactive and positive approach to ensuring decent pay for our workers. Our city is one of the poorest large cities in the U.S., and it is our duty as city leaders to help improve the lives of our citizens, and establishing this minimum wage requirement for city workers and others working on city-related and supported projects is just one way we can help fight back against poverty while helping working families."

Ald. Nik Kovac, a co-sponsor and chair of the council's finance and personnel committee, said, "No one who works full-time should be doing so at a rate that will leave their family in poverty."

Another co-sponsor, Ald. Milele A. Coggs, added, "With additional money in their pockets, workers can buy more goods and services, which helps their families and also helps stimulate our local economy."

Meanwhile, new numbers show that the 13 U.S. states that raised their minimum wages at the beginning of this year are adding jobs at a faster pace than those that did not, providing some counter-intuitive fuel to the debate over what impact a higher minimum has on hiring trends.

Many business groups argue that raising the minimum wage discourages job growth by increasing the cost of hiring. A Congressional Budget Office report earlier this year lent some support for that view. It found that a minimum wage of $10.10 an hour, as President Obama supports, could cost 500,000 jobs nationwide.

But the state-by-state hiring data, released Friday by the Labor Department, provides ammunition to those who disagree. Economists who support a higher minimum say the figures are encouraging, though they acknowledge they don't establish a cause and effect. There are many possible reasons hiring might accelerate in a particular state.

"It raises serious questions about the claims that a raise in the minimum wage is a jobs disaster," said John Schmitt, a senior economist at the liberal Center for Economic and Policy Research. The job data "isn't definitive," he added, but is "probably a reasonable first cut at what's going on."

Just last week, Obama cited the better performance by the 13 states in support of his proposal for boosting the minimum wage nationwide.

"When ... you raise the minimum wage, you give a bigger chance to folks who are climbing the ladder, working hard.... And the whole economy does better, including businesses," Obama said in Denver.

In the 13 states that boosted their minimums at the beginning of the year, the number of jobs grew an average of 0.85 percent from January through June. The average for the other 37 states was 0.61 percent.

Nine of the 13 states increased their minimum wages automatically in line with inflation: Arizona, Colorado, Florida, Missouri, Montana, Ohio, Oregon, Vermont and Washington. Four more states - Connecticut, New Jersey, New York and Rhode Island - approved legislation mandating the increases.

Twelve of those states have seen job growth this year, while employment in Vermont has been flat. The number of jobs in Florida has risen 1.6 percent this year, the most of the 13 states with higher minimums. Its minimum rose to $7.93 an hour from $7.79 last year.

Some economists argue that six months of data isn't enough to draw conclusions.

"It's too early to tell," said Stan Veuger, a scholar at the American Enterprise Institute. "These states are very different along all kinds of dimensions."