After Gov. Tony Evers proposed increasing Wisconsin’s minimum wage by $7.75 per hour, businesses and organizations in the state have continued to advocate for livable wages.
A statewide minimum wage change hasn’t occurred since 2009, but some Madison businesses pursued their own course of action on this issue. Delta Beer Labs, which recently opened this month, decided to build livable wages into their business model.
Chief beer officer Tim Piotrowski said Delta Beer Labs decided paying a livable wage was the right thing to do for their employees and their business.
“When staff work for tips, they work for themselves,” Piotrowski said. “We wanted to foster an environment where [Delta Beer Labs’] mission was so valuable that our staff would work for our mission to expand the craft beer community regardless of gender, race, ethnicity or sexual orientation.”
Minimum wages have been on the rise in the last few years in several states across the U.S., according to the National Conference of Legislatures. The Massachusetts Institute of Technology livable wage formula looks at the cost of living in a specified area, such as the city of Madison, and calculates the per-hour wage it takes to live in that area.
Community and environmental sociology professor Gary Green said the economic policies of former Gov. Scott Walker’s administration focused on a trickle-down system whereas Evers’ new administration appears to be looking at a more grassroots construction of the economy.
“The whole idea is by raising the floor of a segment of the workforce with a living wage that will ripple out to other employers will have to pay a similar wage,” Green said. “… It’s a different approach than giving something like tax breaks to a corporation like Foxconn and it will trickle down.”
The living wage approach assumes that, by raising the wages of low-income workers, a better economy is built, Green said. Critics often charge that employers can’t afford to pay these wages, therefore, won’t hire as many workers Green said.
The traditional approach to economic development, Green said, is that localities have to offer cheap labor to attract businesses and that, over time, wages will rise. But we’re not seeing low-income worker wages rising, Green said.
Piotrowski said that Delta Beer Labs sees the model as a kind of test for Madison’s economy.
“It’s kind of an experiment to see if the Madison community will support our decision to take tipping out of the equation,” Piotrowski said. “To charge slightly more for our beer in order to build that into our revenue-sharing program.”
The revenue sharing program is one way Piotrowski said he hopes employees won’t only receive a wage to afford to live off of but to have the opportunity to save for themselves as well.
Any employee is eligible to benefit from this program and receive a percentage of the revenue that comes in alongside the hours they work, Piotrowski said. All hours worked in the month get divided out by the revenue brought in so everybody gets “an even share of the pie.”
“Our employees benefit from the areas that they each touch,” Piotrowski said. “They all benefit from their work which encourages teamwork … the incentive is to help each other out and carry the burden.”
Paying livable wages is helpful in attracting good workers, Green said. A lot of employers are finding with the low unemployment rate it is getting increasingly difficult to retain skilled workers, Green said.
It is critical for employers to find a way to attract and retain skilled workers and that without that retention, they’re going to have high turnover rates, lose workers to other businesses and see a cutback in productivity, ultimately hurting profits, Green said.
Enforcing these policies is difficult to do on a state level, Green said. Most state legislatures are more conservative than big cities that often support livable wage ordinances, creating pushback to these policies, Green said.
“It really does vary by locality,” Green said. “The cost of living in Madison is quite different than the cost of living in Hayward, Wisconsin … it makes sense to [implement living wage policy] on a regional or local basis.”
Most policies like this surrounding the economy are made on an ideological basis, Green said. Politics and partisanship can prevent research from being the foundation of policies such as minimum or a livable wage, Green said.
Businesses like Delta Beer Labs and organizations such as Fight for 15 remain active advocates for livable wage policies in the U.S. and within local communities. Piotrowski said he thinks it’s important for a company to not only do well in their community but to do good for their community.