Use of living wage ordinances grows
Ever since Baltimore became the first major city to enact a Living Wage Ordinance (LWO) in 1994, more than 130 localities have passed similar measures to raise the wages of city employees and/or those who benefit from city contracts. Proponents say that cities should not subsidize poverty wage jobs, while LWO opponents say the laws hurt more than they help.
Santa Barbara, Calif., Councilman Das Williams has made such ordinances a campaign platform, encouraging their passage in the city and nearby Oxnard, Port Hueneme and Ventura County. “I became involved [with the LWO movement] because I believe that our public contracting system is fundamentally flawed,” Williams says. He views mandated higher wages as a way to level the playing field by forcing all businesses that bid on city contracts to find better ways to be competitive. Awarding contracts to the lowest bidder, Williams says, passes unseen costs to the government in the form of public assistance for employees below the poverty level. “We should want the best and most efficient contractor, not the lowest wage-payer,” Williams says.
Rebekah Jordan, director of the Mid-South Interfaith Network for Economic Justice and a member of the Living Wage Coalition that is pushing for an LWO in Memphis, Tenn., voices a similar argument. “Our biggest concern is that so many companies get multi-million dollar tax breaks in Memphis, then turn around and pay low wages to their employees,” Jordan says, adding that in some cases, the city has designated workers as temporary employees — sometimes for several years — to avoid paying them living wages. The Memphis City Council is considering a resolution, set for an October vote, to pay full-time city workers a living wage.
The Washington, D.C.-based Employment Policies Institute (EPI) argues that considering need rather than skills to pay higher wages to government employees and employees of businesses that have city contracts is a misguided approach to helping the working poor and a veiled attempt to increase private sector costs to reduce privatizing public sector jobs. In the 2000 study “Living Wage Policy: The Basics,” EPI states that “all research conducted by independent economists report that living wage laws have adverse economic consequences.” When employers must pay significantly higher wages, they will be forced to cut their workforce, and those same lower-rung positions, once open to all, will be awarded to workers with higher skill levels, EPI says. In addition, low-income workers may lose more in public assistance than they gain in wages if LWOs are enacted.
In Manchester, Conn., where a highly contested LWO was passed in April, Stephanie Luce, a researcher at the Political Economy Research Institute at the University of Massachusetts, spoke in favor of the ordinance. She said her research has consistently found that the costs to firms and cities was relatively low and easily dispersed and significantly improved the recipients’ standard of living.
The Manchester Chamber of Commerce, however, said Luce’s research was paid for by organized labor and, therefore, biased. Still, Luce stands by her research. “If I’m biased to anything, it is being biased to figuring ways to improve the working conditions of American workers,” she says.
Some people mistakenly believe that LWOs automatically benefit all low-wage workers. Manchester Chamber of Commerce President Sue O’Connor says one woman spoke at a town meeting in favor of passing the ordinance believing she could receive the additional wages. However, as a department store employee, the woman would not benefit from the ordinance. O’Connor says that she has heard other, similar stories.
Realizing that relatively few low-income workers would benefit from the passage of an LWO, the chamber proposed its own Low-Income Family Earners (LIFE) program, which aims to create career opportunities for all low-income employees regardless of whether they work for or contract with city government. Manchester did not adopt the chamber’s plan.
“LWOs are not at all a solution to poverty,” admitted Luce, suggesting they should be a complement to other programs. “They just don’t affect enough people.”
Annie Gentile is a Vernon, Conn.-based freelance writer.