Opinion: Eric Hovde in no hurry to raise pay for low-wage workers

Fast food worker

(Shutterstock)

By Pat Kreitlow

May 15, 2024

“I’m bad because I’m the One Percent?”

On July 24, 2009, movie theaters were showing a pair of rom-coms, “500 Days of Summer” and “The Ugly Truth.” The ugly truth right now for Wisconsin workers is that it has been nearly 5,500 days since that date when the minimum wage was increased at the lowest legal end of the pay scale. It’s at a $7.25/hour rate that is not likely to change if Republican Eric Hovde is elected to the US Senate, based on past statements.

“Guess what? Minimum wage was never supposed to be a living wage,” Hovde told a radio host in August 2017. “Minimum wage jobs were generally entry-level jobs that high school or college kids took. And it was a way to teach you at that age ‘I don’t want to be in this job the rest of my life. I better work hard in school or get a technical skill, be it electrician or a plumber or whatever it is, so I’m not stuck in this job in another five, ten years.”

It’s been 15 years since minimum wage workers got a raise from the state or federal governments, and there are now 1 million Americans working at jobs that pay $7.25 or less—some entry-level teenagers but also a number of adults with low-level skills who have to support a family on a pay rate that now hovers around the poverty level.

Expanding the lens a bit to include all low-wage workers (defined as making less than two-thirds of the median wage of workers in their prime working years of ages 25–54), there are 30 million Americans whose pay would likely be enhanced if the minimum wage were to increase. Women make up more than half of the low-wage workforce, made up largely of jobs in the areas of personal care, leisure and hospitality, and food prep and service.

It’s not easy to pin down Hovde on his alternative to working for low wages. Higher education is commonly seen as a path to better pay, but Hovde said in that same interview there are college graduates who are only qualified for some of those same low-wage jobs.

“I think one of the unfortunate things about this whole culture [of] ‘my child has to go to a four year college’ is we’ve diverted far too many people into a four-year college, getting a lot of degrees that they come out with that you really can’t do much with other than being a barista at Starbucks,” Hovde said dismissively. “Nothing against a history major or, you know, whatever it studies — that you get no skill to take and do that with.”

Hovde likened minimum pay raises with handouts that he claims lead to dependency and depression. His solution involved corporate tax reform—the Republican tax bill that would later provide large breaks to corporations and wealthy filers was in the drafting process at that time.

“We have the highest corporate tax rate in the world,” Hovde said. ”It hurts the working class guy who wants a good paying job.”

In reality, while the corporate tax rate prior to 2017 has been 35%, the “effective tax rate” (the amount actually paid after accounting for loopholes and other tax breaks) was estimated at 22%. And after the Trump tax law reduced the corporate tax rate to 21%, the effective rate fell to 13%.

A new report by the Institute on Taxation and Economic Policy says the 296 “largest and consistently profitable US corporations” in their study paid $240 billion less in taxes from 2018 to 2021 than if they had continued to pay the effective rates they’d paid before the Trump tax law. That’s $240 billion that had to be made up by individual taxpayers and small businesses if federal costs stayed the same. And while profits for those companies rose by 44% after passage of the Trump tax law, their federal tax bills dropped by 16 percent.

Minimum wage workers, meanwhile, are still being paid the $7.25 an hour that took effect in July 2009.

Hovde sounded resentful when he told a radio host in 2012 how he thinks others expect him to feel about his wealth, starting with a company founded by his grandfather.

“I’m now supposed to feel guilty because I worked hard and succeeded in life and have done good and employed people and helped support their families, and given money away to people that are struggling, but now I’m bad because I’m the One Percent?”

Author

  • Pat Kreitlow

    The Founding Editor of UpNorthNews, Pat was a familiar presence on radio and TV stations in western Wisconsin before serving in the state Legislature. After a brief stint living in the Caribbean, Pat and wife returned to Chippewa Falls to be closer to their growing group of grandchildren. He now serves as UNN's chief political correspondent and host of UpNorthNews Radio, airing weekday mornings 6 a.m.-8 a.m on the Civic Media radio network and the UpNorthNews Facebook page.

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