The Politics of the Minimum Wage
It occurs to me that although I have discussed the minimum wage issue from a economic and philosophical point of view, I have never fully flushed out the politics of it.
In Wisconsin, the minimum wage (called the “living wage” in the statutes) is set by the Executive branch. The Legislature ceded this responsibility to the Executive in section 104 of the statutes.
When the Executive thinks that the minimum wage is too low, he may appoint a committee to discuss changing it. The committee must be “selected so as fairly to represent employers, employees and the public.” Whatever the committee comes up with, is passed as an administrative rule.
As you can see, the legislature has no role in the actual process. The Legislature does, however, retain the power of oversight. They also have the power of writing law. If the legislature does nothing, the new minimum wage, as set by administrative rule, will go into effect. If the Legislature passes a bill forbidding implementation of the rule and the governor signs it into law, then the new minimum wage would not go into effect.
There’s the rub. The governor, who appointed the commission and supports raising the minimum wage, will veto any bill that seeks to block an increase in the minimum wage. The Legislature does not have the votes to override a veto.
So, effectively, the Legislature, which is run by Republicans, has absolutely no power to block a minimum wage increase mandated by the Democratic governor.
Even though the Republicans in the Legislature can’t block the increase in the minimum wage, they can delay it. Once a bill is introduced to block the implementation of an administrative rule that raises the minimum wage, the administrative rule may not go into effect until the bill is disposed of. The bill lives until it is either voted up or down, or the legislative session ends. So the Republicans have introduced a bill to block the increase in the minimum wage and stuck it in committee until the session ends.
Normally, the legislative session ends around May. That would be May of 2006. The Republicans have stalled the implementation of the rule even further by extending their legislative session until December of 2006 – after the next governor’s election. I am told that they extended the session for a number of reasons, but stalling an increase in the minimum wage appears to be the primary reason.
Even if Doyle is voted out of office, he will still be the governor in December of 2006. As such, the increase in the minimum wage will go into effect. There is nothing that anyone (except Doyle) can do about it.
Now that we understand the reality of the situation, let us turn our attention to the politics of it all.
The GOP, which opposes an increase in the minimum wage, is seeking a compromise increase. They do not want to give Doyle and the Democrats an outright victory, so they are seeking to mitigate the damage. The new wage that Doyle’s committee has decided upon is $6.50/hour. The GOP is offering an increase to $6.00/hour. If Doyle agrees, then they will let the rule take effect immediately.
Since we have already determined that the GOP does not have any real power over the issue, let us look at what political weight each side brings to the table.
The GOP controls the legislature. As such, they can refuse to pass legislation that Doyle wants in order to put pressure on him to compromise.
Doyle has much more political leverage. The most obvious is that he holds the power of the veto. The Wisconsin governor has one of the most powerful vetoes in the nation and Doyle has already shown that he is not shy about using it.
Doyle also holds public opinion. As much as it frustrates me, a majority of the people generally support increases in the minimum wage. It’s easy to get people excited about raising the minimum wage because it makes them feel like they are doing good for the common man. It is also easy to paint those of us who oppose the minimum wage as cold-hearted bastards.
Doyle also has the organized support of the unions and other liberal groups that support an increase in the minimum wage. These groups can pack public hearings and generally raise a ruckus that benefits Doyle.
Many of the Democratic mayors and other municipal leaders are also helping Doyle out by threatening to increase their individual municipalities’ minimum wages. The thought of having 30 different minimum wages in Wisconsin makes the thought of a statewide increase in then minimum wage seem almost palpable. This is why Doyle vetoed, and is threatening to veto again, a bill that would have forbidden anyone but the state from setting the minimum wage.
As you can see, the GOP does not have a lot of leverage to convince Doyle to compromise. That’s precisely why he hasn’t.
You may notice that I have excluded one very important group. Business leaders. This is one of the most curious aspects of this whole debate. In general, the majority of business people oppose a minimum wage increase. To them, it just represents an additional cost that businesses in other states and other countries do not have to bear. But the business lobbyists are voicing their support for Doyle’s increase to $6.50/hour. This is worth a little more thought.
Let us start with the commission that decided upon the $6.50 number. Here are the business leaders on the commission:
These are the business leaders to whom Doyle points when he claims to have the support of the business community.
All of the other people on the commission were bureaucrats, union thugs, or politicians. These business leaders were on the commission to represent the interests of business. Since any poll of the business community shows massive opposition to a minimum wage increase, why would they support an increase – and one of such a drastic nature?
I have three theories.
First, it could be as simple as these guys like hanging out with the governor. It would be all too human for them to be flattered by the attention and proximity of the governor. Furthermore, since four of the five business leaders are actually lobbyists, it could be that they were either implicitly or explicitly promised progress on their agenda if they supported the increase. A lobbyist’s job is to leverage influence, and one favor begets another.
Second, these business leaders could be scared by the threats of municipalities to increase their individual minimum wages. The Balkanization of the minimum wage in Wisconsin would be an administrative nightmare for any multi-site business. The business leaders may view a statewide increase as preferable to 30 different minimum wages in the state.
Third, these business leaders could be acting to quash competition. Most of the business leaders on the commission represent businesses that have employees that earn the minimum wage, or perhaps a little bit more. Associations like these (and Culvers) are generally dominated by the successful businesses that have the time and money to invest into such organizations. For instance, Roundy’s, which has dozens or hundreds of stores, has much more power in the Grocer’s Association than a single Mom & Pop store. So, if there is an increase in the minimum wage, which company can better absorb the cost – the chain of 100 stores or the Mom & Pop store with 20 employees? These business leaders may be supporting an increase in the minimum wage for the sole purpose of crushing some of their smaller competitors.
If business leaders had come out in strong opposition to an increase in the minimum wage, it is possible that the GOP could have gotten Doyle to come to the bargaining table. It’s too late now.
So… Where do we go from here?
As I said, the GOP can’t block the increase in the minimum wage from taking place. They also lack the political leverage to compel Doyle to compromise. The only thing left is for each side to set up the issue to be a factor in the 2006 governor’s election.
Doyle and the Democrats are using the issue to paint the Republicans as cold-hearted obstructionists who want to hurt people. Frankly, this always works well with the Democratic base, but has been used too often to have much power in the rest of the electorate. Republicans are mean *yawn* - whatever. We’ve heard it too often for it to carry any weight.
The GOP is using the issue to paint Doyle as an uncompromising jerk. This issue will be one example in a long list that shows that Doyle refuses to work with the legislature. It’s a relatively weak political point, but one that may gain a little traction during the next election.
In the end, remember that the issue is already settled. All that is left is the political warfare.
(Cross posted at Boots & Sabers)
In Wisconsin, the minimum wage (called the “living wage” in the statutes) is set by the Executive branch. The Legislature ceded this responsibility to the Executive in section 104 of the statutes.
When the Executive thinks that the minimum wage is too low, he may appoint a committee to discuss changing it. The committee must be “selected so as fairly to represent employers, employees and the public.” Whatever the committee comes up with, is passed as an administrative rule.
As you can see, the legislature has no role in the actual process. The Legislature does, however, retain the power of oversight. They also have the power of writing law. If the legislature does nothing, the new minimum wage, as set by administrative rule, will go into effect. If the Legislature passes a bill forbidding implementation of the rule and the governor signs it into law, then the new minimum wage would not go into effect.
There’s the rub. The governor, who appointed the commission and supports raising the minimum wage, will veto any bill that seeks to block an increase in the minimum wage. The Legislature does not have the votes to override a veto.
So, effectively, the Legislature, which is run by Republicans, has absolutely no power to block a minimum wage increase mandated by the Democratic governor.
Even though the Republicans in the Legislature can’t block the increase in the minimum wage, they can delay it. Once a bill is introduced to block the implementation of an administrative rule that raises the minimum wage, the administrative rule may not go into effect until the bill is disposed of. The bill lives until it is either voted up or down, or the legislative session ends. So the Republicans have introduced a bill to block the increase in the minimum wage and stuck it in committee until the session ends.
Normally, the legislative session ends around May. That would be May of 2006. The Republicans have stalled the implementation of the rule even further by extending their legislative session until December of 2006 – after the next governor’s election. I am told that they extended the session for a number of reasons, but stalling an increase in the minimum wage appears to be the primary reason.
Even if Doyle is voted out of office, he will still be the governor in December of 2006. As such, the increase in the minimum wage will go into effect. There is nothing that anyone (except Doyle) can do about it.
Now that we understand the reality of the situation, let us turn our attention to the politics of it all.
The GOP, which opposes an increase in the minimum wage, is seeking a compromise increase. They do not want to give Doyle and the Democrats an outright victory, so they are seeking to mitigate the damage. The new wage that Doyle’s committee has decided upon is $6.50/hour. The GOP is offering an increase to $6.00/hour. If Doyle agrees, then they will let the rule take effect immediately.
Since we have already determined that the GOP does not have any real power over the issue, let us look at what political weight each side brings to the table.
The GOP controls the legislature. As such, they can refuse to pass legislation that Doyle wants in order to put pressure on him to compromise.
Doyle has much more political leverage. The most obvious is that he holds the power of the veto. The Wisconsin governor has one of the most powerful vetoes in the nation and Doyle has already shown that he is not shy about using it.
Doyle also holds public opinion. As much as it frustrates me, a majority of the people generally support increases in the minimum wage. It’s easy to get people excited about raising the minimum wage because it makes them feel like they are doing good for the common man. It is also easy to paint those of us who oppose the minimum wage as cold-hearted bastards.
Doyle also has the organized support of the unions and other liberal groups that support an increase in the minimum wage. These groups can pack public hearings and generally raise a ruckus that benefits Doyle.
Many of the Democratic mayors and other municipal leaders are also helping Doyle out by threatening to increase their individual municipalities’ minimum wages. The thought of having 30 different minimum wages in Wisconsin makes the thought of a statewide increase in then minimum wage seem almost palpable. This is why Doyle vetoed, and is threatening to veto again, a bill that would have forbidden anyone but the state from setting the minimum wage.
As you can see, the GOP does not have a lot of leverage to convince Doyle to compromise. That’s precisely why he hasn’t.
You may notice that I have excluded one very important group. Business leaders. This is one of the most curious aspects of this whole debate. In general, the majority of business people oppose a minimum wage increase. To them, it just represents an additional cost that businesses in other states and other countries do not have to bear. But the business lobbyists are voicing their support for Doyle’s increase to $6.50/hour. This is worth a little more thought.
Let us start with the commission that decided upon the $6.50 number. Here are the business leaders on the commission:
Craig Culver, Prairie du Sac, Co-founder of Culver's Restaurants
Ed Lump, Madison, President and CEO of the Wisconsin Restaurant Association
Brandon Scholz, Madison, President and CEO of the Wisconsin Grocers Association
James Buchen, Madison, Vice President of Government Relations for Wisconsin Manufacturers and Commerce
Bill Smith, Madison, State Director for the Wisconsin Chapter of the National Federation of Independent Business (NFIB)
These are the business leaders to whom Doyle points when he claims to have the support of the business community.
All of the other people on the commission were bureaucrats, union thugs, or politicians. These business leaders were on the commission to represent the interests of business. Since any poll of the business community shows massive opposition to a minimum wage increase, why would they support an increase – and one of such a drastic nature?
I have three theories.
First, it could be as simple as these guys like hanging out with the governor. It would be all too human for them to be flattered by the attention and proximity of the governor. Furthermore, since four of the five business leaders are actually lobbyists, it could be that they were either implicitly or explicitly promised progress on their agenda if they supported the increase. A lobbyist’s job is to leverage influence, and one favor begets another.
Second, these business leaders could be scared by the threats of municipalities to increase their individual minimum wages. The Balkanization of the minimum wage in Wisconsin would be an administrative nightmare for any multi-site business. The business leaders may view a statewide increase as preferable to 30 different minimum wages in the state.
Third, these business leaders could be acting to quash competition. Most of the business leaders on the commission represent businesses that have employees that earn the minimum wage, or perhaps a little bit more. Associations like these (and Culvers) are generally dominated by the successful businesses that have the time and money to invest into such organizations. For instance, Roundy’s, which has dozens or hundreds of stores, has much more power in the Grocer’s Association than a single Mom & Pop store. So, if there is an increase in the minimum wage, which company can better absorb the cost – the chain of 100 stores or the Mom & Pop store with 20 employees? These business leaders may be supporting an increase in the minimum wage for the sole purpose of crushing some of their smaller competitors.
If business leaders had come out in strong opposition to an increase in the minimum wage, it is possible that the GOP could have gotten Doyle to come to the bargaining table. It’s too late now.
So… Where do we go from here?
As I said, the GOP can’t block the increase in the minimum wage from taking place. They also lack the political leverage to compel Doyle to compromise. The only thing left is for each side to set up the issue to be a factor in the 2006 governor’s election.
Doyle and the Democrats are using the issue to paint the Republicans as cold-hearted obstructionists who want to hurt people. Frankly, this always works well with the Democratic base, but has been used too often to have much power in the rest of the electorate. Republicans are mean *yawn* - whatever. We’ve heard it too often for it to carry any weight.
The GOP is using the issue to paint Doyle as an uncompromising jerk. This issue will be one example in a long list that shows that Doyle refuses to work with the legislature. It’s a relatively weak political point, but one that may gain a little traction during the next election.
In the end, remember that the issue is already settled. All that is left is the political warfare.
(Cross posted at Boots & Sabers)
posted by Owen @ 10:09 PM
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