In a move that could potentially jeopardize Madison’s minimum-wage ordinance, the state Senate passed a bill Wednesday that would preempt municipalities from setting a minimum wage higher than the statewide standard.

The bill, which passed despite united Democratic opposition, would repeal the minimum-wage ordinances approved in Madison and Milwaukee and prevent other localities from establishing limits different from what the state mandates.

To become law, the legislation would need to be passed by the Assembly before going to Gov. Jim Doyle, who vetoed a similar bill last session.

The bill comes after Madison, and later Milwaukee, enacted increases to municipal wage limits in the last year. Madison’s minimum wage went up to $5.70 an hour Jan. 1 this year and will ultimately increase to $7.75 an hour by 2008, with the wage tied to inflation thereafter.

Proponents of the bill claim such individual wages create needless red tape for businesses when choosing to locate in and around municipalities.

“We don’t think that [the] state can operate with a hodgepodge of minimum wages,” Wisconsin Restaurant Association President Ed Lump said. “Cities have finite borders. It’s hard for retailers close to those borders when, half a mile away, another business is operating under a different wage scale.”

Democrats, however, said the Legislature should instead focus on increasing the statewide minimum wage, which has remained stagnant at $5.15 per hour since 1997.

“While the GOP is playing politics, hoping to deny the governor any type of political victory, there are thousands of Wisconsin citizens who are working for less than poverty wages,” Sen. Dave Hansen, D-Green Bay, said Tuesday at a press conference. “It is politics at its most cynical and most cruel.”

Republicans and the governor’s office have remained in gridlock on the minimum-wage issue since last fall, when Doyle, following the recommendation of a panel of business and labor leaders, advanced an administrative rule that would raise the state’s minimum wage to $6.50 per hour.

A joint legislative committee subsequently blocked the rule’s implementation. But the whole Legislature must still vote on the rule this session, and, with Republicans not holding enough seats to overcome a Doyle veto, the increased wage will take effect by the end of the session.

Still, GOP leadership extended the current legislative session through December 2006 in a move that many say was made precisely to delay the rule’s implementation for as long as possible.

Todd Allbaugh, spokesman for Senate Majority Leader Dale Schultz, R-Richland Center, said Schultz has not decided on whether the statewide minimum wage should be raised. But he noted there are other ways to help low-income workers.

“That’s the great hypocrisy of Democratic talk on the floor,” Allbaugh said. “They talk about how terrible it is we’re sentencing poor families to these jobs. Minimum-wage jobs were never meant to sustain families. We want to work on economic initiatives that provide jobs that support families.”

Deal?

Some speculation has centered on a potential compromise surfacing between Doyle and the GOP, with the governor signing the preemption bill in exchange for Republicans advancing the administrative rule.

Leaders on both sides remained reluctant this week to discuss whether any such deal is in the works, however. Senate Minority Leader Judy Robson, D-Beloit, said “no progress” has been made, while Doyle spokesperson Melanie Fonder said discussions have taken place, but little movement on the issue has been made.

Both sides would like the other to make the first move. Fonder said although Doyle opposes a patchwork of different minimum wages throughout the state, he cannot prevent cities from acting if the state does not help low-income workers first.

“The Legislature has not done anything to raise the minimum wage,” Fonder said.

Allbaugh indicated the Assembly and Senate have been in contact with the governor, but they will not budge without the preemption bill being passed.

“The Legislature will not entertain an increase without preemption, and it’s probably vice-versa [on the governor’s side],” Allbaugh said. “I can simply tell you that the majority leader wants to work with the Assembly and the governor, and preemption is the first step.”

Impact on Madison

Ald. Austin King, District 8, the chief architect of Madison’s ordinance, denounced the Senate bill as a “waste of everyone’s time” doomed to meet Doyle’s veto pen. King also blasted any potential compromise, including a ban on individual municipalities setting their own wage floors.

“That’s not a compromise — that’s selling out working people,” King said. “Preemption would be a huge bone thrown to big business.”

The Senate bill is not the first attack on Madison’s ordinance. A group of business organizations called the Main Street Coalition for Economic Growth filed suit against the City of Madison in December, alleging the ordinance exceeds the authority afforded to the city under the state Constitution.

A ruling in Dane County Circuit Court is expected by the end of the month.

Lump, whose organization is one of 20 comprising the coalition, said an appeal is likely from whichever side loses.

Still, Lump applauded the Senate bill as more efficient than the court in addressing the problems presented by Madison’s non-conforming minimum wage.

“We’re hopeful the Legislature will settle this so it is over quicker and the outcome is more certain,” Lump said.

So far the increased wage in Madison appears to have had little impact on businesses, largely due to a lack of workers earning minimum wage. The exodus of businesses to Fitchburg as they are forced to pay artificially high wages, King jokes, has yet to materialize.

But Dick Story, president of the Dane County Tavern League, said some chain restaurants on the periphery of the city have suffered from the new ordinance, as they are forced to compete on an uneven playing field with chains in the suburbs.

“Several of the restaurants with liquor licenses and some chain restaurants are going to be put at odds because there might be another chain restaurant nearby,” Story said.

Lump said there has been little impact yet, but when inflation indexing takes effect in 2008, problems will arise as inflation periodically exceeds economic growth.

“The real harm comes in the next few years, when, indexed to inflation, wages will be forced up by law when the economy is down,” Lump said. “It’s interesting that when (Anthony) Earl was (Wisconsin) governor, his party controlled the Legislature by a wide margin, yet they did not raise minimum wage because the economy was terrible. Tommy Thompson raised it a couple of times under better economies.”

King defended indexing as the only way to prevent the minimum wage from constantly becoming archaic.

“Right now, every year the minimum wage loses value,” King said. “Indexing is what the state should do but doesn’t.”