June 18, 2021
From COWS and Kids Forward
The Economic Policy Institute recently released a report showing that the Raise the Wage Act of 2021 would raise wages for more than a half-million child care workers nationwide. The Raise the Wage Act would raise the national minimum wage to $15 per hour by 2025.
Here we summarize findings for Wisconsin and add some context to fill out the picture on wage standards in child care. Wisconsin’s wage floor is at the current federal minimum wage $7.25 per hour. Stuck at $7.25 since 2009, inflation has reduced the purchasing power of the minimum wage by 18 percent. If the 1968 minimum wage was adjusted for inflation, it would be $10.59 per hour. If the minimum wage had grown along with productivity over the last 50 years, it would be $22 today.
With $15 by 2025, how many childcare workers would earn more?
- Nationally, 43 percent of child care workers would earn more.
- In Wisconsin, 67 percent of child care workers would earn more. That’s a wage increase for 16,000 child care workers in the state.
- Other states where more than two out of every three child care workers would earn more include: Alabama (72%), Arkansas (69%), Iowa (73%), Kansas (76%), Kentucky (79%), Louisiana (72%), Mississippi (69%), Nebraska (69%), New Mexico (69%), Oklahoma (73%), Texas (70%), and Utah (75%).
$15 by 2025 helps create greater gender, racial, and ethnic equity.
- Raising child care worker wages helps create greater equity for the women and people of color who do these jobs. Nationally child care workers who will see increases are overwhelmingly women (95%) and disproportionately Black or Hispanic.
- Child care workers who get raises would bring home $2,900 more per year.
Why Wisconsin’s Child Care Wages are so Low
Wisconsin is currently one of just 21 states where the wage floor is set by the federal minimum. (29 states and the Washington DC have wage floors above the federal minimum.)
- Child care workers often have wages close to the wage floor, but Wisconsin’s $7.25 wage floor is now well behind most of our neighbors. In Minnesota the current minimum is $10.08 per hour and in Illinois it is $11.
- While many of the states with higher minimum wages are on the coasts, Montana, South Dakota, West Virginia, and Missouri all have minimum wages above Wisconsin’s.
- 18 states and Washington DC annually increase their minimum wage so that it keeps pace with inflation.
COVID Context and Child Care Wages
Even before the pandemic, Wisconsin’s child care infrastructure showed signs of stress. Families faced high care costs and sometimes struggled to find quality care. Earning very low-wages, early care and education teachers struggled to make ends meet. Then COVID-19 overturned structures shaping work, health, and schooling. The health crisis made clear that Wisconsin’s child care sector is essential to our children, families, employers, and communities.
There is increasing evidence that labor markets will be getting tighter in coming months and some evidence that finding quality teachers is getting more difficult. Raising the wage floor will help raise standards across the board and create an even playing field with better living standards for the workforce. This is especially important in child care, where low wages for workers’ have been used as the way to keep costs down. The timeline of this raise and current public attention to issues in early care and education allows time for the development of public initiatives that can support affordability and quality of care as we increase the quality of the jobs.
Securing a decent standard of care requires dramatically reshaping our understanding of what care work is, what it is worth, and how to pay for it. Child care workers are providing a considerable public good and should have a decent standard of living, not poverty wage jobs. The Raise the Wage Act is a step in the direction of valuing this work.
For more information about the overall impact of the Raise the Wage Act in Wisconsin, see COWS’ $15 by 2025.