Wage laws see varied results over 14 years

Since 1994, when Baltimore became the first municipality in the nation to pass a living wage ordinance (LWO), scores of cities and special districts have followed suit. Fourteen years later, some of the ordinances have been repealed, others have been modified, while a few are prompting neighboring jurisdictions to adopt similar labor rules.

In general, LWOs require government contractors or companies that receive publicly funded economic subsidies to pay their workers at a rate that exceeds the federal ($6.85 per hour) or state minimum wage. LWO advocates claim that employers who do not pay their workers a living wage pass a burden on to taxpayers, who are forced to subsidize low-wage earners with government-funded programs. And, they claim that LWOs ultimately benefit employers and their workers because higher wages help reduce workforce absenteeism and turnover, and improve morale.

In August, Manchester, Conn., repealed its 27-month-old LWO in a 5-4 vote. The change was prompted by the discovery that a contract with the town’s health insurance administrator did not meet the city’s wage standard for some of the company’s employees in other states. The insurer asked for a waiver, and some board members proposed an amendment to the ordinance to require large employers to meet the wage standard only for those employees who may work directly or indirectly on Manchester contracts. Instead, the board of directors repealed the ordinance.

Flexibility has helped sustain the LWO that Ann Arbor, Mich., officials adopted in March 2001. The ordinance exempts seasonal parks and recreation workers, and applies only to city contracts of $10,000 or more. Presently, Ann Arbor’s LWO calls for employers who contract with the city to pay $10.85 per hour to their employees if they provide medical benefits and $12.56 per hour if they do not. City Administrator Roger Fraser says a few exemptions have been made to the ordinance over the years, including one for a recycling operation that employs approximately 20 low-wage manual labor employees. Including the recycling employer in the LWO would have significantly increased costs to the city, Fraser says.

Additionally, in April, the Ann Arbor City Council voted to exempt the city’s annual summer festival from the ordinance because many of the festival workers are high school and college students. “[Those exempted] are mostly students who are not supporting a family, and not the type of people that were in mind when the ordinance was designed,” he says. In the past, the city’s contribution to the festival was held to just under $10,000 to avoid triggering the law, and the exemption meant the city could increase its donation.

Meanwhile, LWOs around Ventura County, Calif., have been expanding steadily since the county passed the first ordinance in the region in 2001, says Santa Barbara Councilman Das Williams. Since that time, the city of Ventura, Oxnard and Port Wynemie have adopted LWOs, and Santa Barbara enacted one in 2006. Santa Barbara adjusts its living wage rate annually. In fiscal year 2008-2009 Santa Barbara’s LWO calls for employers to pay either $11.86 or $12.94 per hour depending on the benefits provided, or $15.10 per hour if no health benefits are included.

The concentration of LWOs in the area means that no one city is at a disadvantage when competing for contracts. “We now have such a critical mass of jurisdictions that any business serious about contracting with cities needs to think strongly about paying a living wage,” Williams says.

— Annie Gentile is a Vernon, Conn.-based freelance writer.