DEFEND WISCONSIN: Lower-paid workers are taking twice the pay cut of higher-paid workers

September 25, 2011
Defend Wisconsin

Lower-paid state workers will have to contribute a higher percentage of their salary to comply with Walker’s union stripping law raising pension and health care costs, according to a new analysis by the non-partisan Legislative Fiscal Bureau.  The analysis shows that lower-paid workers are taking twice the pay cut of higher-paid workers.

A state worker earning $25,000 a year will see their total pension and health care costs increase from 4.5 percent of their salary to 11.3 percent. A worker earning $50,000 a year will see their share increase from 2.3 percent to 8.5 percent. And workers earning $125,000 will see their cost increase from 1.1 percent to 6.7 percent. The monthly cost is $2,828 for those earning $25,000, $4,228 for those making $50,000 and $8,428 for those earning $125,000.

“It’s completely inequitable that a middle class worker making $25,000 a year takes almost twice the effective pay cut of an employee making $125,000,” said Rep. Terese Berceau, (D-Madison) ranking Democrat on the Assembly Children and Families Committee.

Berceau and Democratic Reps. Chris Taylor and Brett Hulsey said in a news release that they are exploring options how to address the unequal pay cuts as part of the Fall Legislative Session.

In addition, a U.S. Census Bureau report released Thursday shows plummeting income among Wisconsin’s working families. The median household income in the state declined 14.5% between 1999 and 2010.

“When Wisconsin unemployment rates were at 3%, everyone was doing great, we were building SUVs and everyone was buying them,” said Timothy Smeeding, who directs the Institute for Research on Poverty at the University of Wisconsin-Madison. “We were manufacturing our pants off. But times are changing.”

“The pain is out there,” he added. “A working-age family, they’re still in the middle class. But the middle class is taking a beating.”