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4/5/02: The following is a great primer story
on the Living Wage movement that the Coalition has been interested in for some time,
but has now made it to the mainstream press with an article in the current edition
of TIME Magazine (April 8, 2002 Vol. 159 No. 14) With efforts in the City of Miami,
Coral Gables, South Miami, University of Miami, Broward County, and even possible
Palm Beach County; members might enjoy the following.
How Much Is A Living Wage?:
Inside the Movement to Boost Minimum Pay
By Eric Roston
Jerome Gibbons works about 60 hours a week, just as he did five years ago--but with
one difference. In 1997 Gibbons held two demanding jobs--as a wheelchair attendant
at Los Angeles International Airport and a security guard in an office tower. He
still works 40 hours a week at the airport, but thanks to the city's five-year-old
"living wage" ordinance, which raised the minimum wage for firms that
contract with the city, his hourly pay has jumped from $5.75 to $9.54. He has been
able to drop his second job and now studies at a local college for what he hopes
will be a better job, as a counselor to substance abusers. Gibbons, 31, who is unmarried,
says of the city-mandated pay raise: "It makes paying bills easier and going
to school easier."
More and more low-wage workers like Gibbons are finding hope for a better life as
the living-wage movement gains momentum. Devoted to the principle that people who
work full time should not live in poverty, the living-wage campaign won its first
success in Baltimore, Md., in 1994, and has since spread to 81 other cities and
counties--including Boston and Santa Fe, N.M.--as well as such institutions as universities
and school boards. Living-wage proposals are pending in dozens of other localities,
from Santa Monica, Calif., to New York City.
Driving the movement is new evidence that may dispel early fears that the social
benefit from higher wages would be wiped out by job cutbacks among businesses subject
to the living-wage laws. Last month a study of 36 cities with living-wage laws--conducted
by David Neumark, a Michigan State University economics professor and an early skeptic
of such laws--found that the slight job losses caused by the higher wages are more
than offset by the decrease in poverty among working families. "The impact
on businesses and governments is very small," says Robert Pollin, an economics
professor at the University of Massachusetts at Amherst. "If there were any
evidence otherwise, it would have shut down the living-wage movement a long time
These laws generally require that contractors who work for local governments--and
in some places, businesses that receive subsidies and tax breaks--must pay employees
enough to raise their income above the federal poverty level of $18,100 for a family
of four. That works out to more than $8 an hour--though some cities with high living
costs like Santa Cruz, Calif., require hourly wages as high as $12.55. (The federal
minimum wage is $5.15.)
Some cities are attempting more sweeping reforms. In February, New Orleans voters
approved by 2-1 a referendum that would require every private employer in the city
to pay at least $6.15 an hour. Activists went to court the next day to ask a judge
to strike down a 1997 state law banning local minimum wages. Last week the judge
ruled that ban unconstitutional (five other states have similar laws), so New Orleans
will be free to force higher wages May 3, pending an expected review this week by
the Louisiana Supreme Court.
The Santa Monica city council passed an ordinance last July that would impose a
living wage not only on its contractors but also on hotels and other major businesses
located in a 1.5-sq.-mi. "coastal zone," adjacent to its famous beach.
Hotel owners got enough signatures to suspend imposition of the law, and are challenging
it in a referendum that will be on the city ballot in November.
The living-wage movement is generating organized resistance, notably among hotel
and restaurant owners and other employers of low-wage workers. "I feel every
minimum wage, even at the federal level, costs jobs," says Jerome Fein, 51,
owner of the venerable Court of Two Sisters restaurant in New Orleans. "I think
it's a business decision, not a government decision." New Orleans' new law,
Fein says, will cost jobs at his restaurant and elsewhere in the city. But a large
majority of the city's voters--including many of the 47,000 who work in service
jobs--believe that their bosses' warnings are overblown.
Are such laws fair to employers? The debate often centers on whether local businesses
owe something to the community for the favors they get. Private hotels, restaurants
and shops do not usually get city service contracts. But they often receive indirect
support from local governments through tax abatements and other subsidies, and living-wage
advocates say they should give something back. That argument is heard not only in
New Orleans but also in Santa Monica, where the city council wants to impose a $12.25
living wage for employers who don't provide health insurance and a $10.50 wage for
those who do. The wage would apply to city employees, contractors who do business
with the city and businesses with more than $5 million in annual revenues within
its coastal zone--a tourist haven that city taxpayers spent more than $180 million
redeveloping in the 1980s and '90s....
Living-wage proponents, though they are up against companies with enormous war chests,
have scored victories in unlikely places. Last July, Suffolk County, on New York's
Long Island, claimed to become the first county with a Republican legislature to
pass a living-wage bill--and did so over the county executive's veto. There, as
elsewhere, the ordinance had the backing not only of unions but also of religious
groups and ordinary citizens who support a social policy that emphasizes work. The
coalition "cuts against conventional fault lines," says Dan Cantor, executive
director of New York's Working Families Party, a three-year-old organization. Jen
Kern, director of the Living Wage Resource Center, an arm of the community organizer
acorn, says, "It's risky not to do anything when people working on the public
dollar are sleeping in cars at night."
So far, living-wage laws directly affect only about 1% of workers in communities
that have them, but they have indirect effects on other employers that feel they
must increase wages to attract employees. The laws give more bargaining muscle to
unionized city and county workers, whose ranks have been thinned by the privatization
of many government functions. Both directly and indirectly, living-wage laws can
drive up government spending. Suffolk legislator Allan Binder, a leading critic
of the county's minimum wage for contractors and firms that receive county funds,
cites a study that found the county may have to shell out an extra $13.5 million
a year for increased wages. "We have no idea of its impact," says Binder.
"We're going into untried territory."
Economist Neumark found that from 1996 to 2000, poverty fell more sharply in living-wage
cities than elsewhere. Disproportionate unemployment occurred but, he writes cautiously,
"on net, living wages may provide some assistance to the urban poor."
Living-wage advocates see Neumark as a conservative minimum-wage basher converted
by the success of living wages--a characterization that appears to make him uncomfortable.
Critics on the right fault his study for narrowly focusing on families pushed just
above the official poverty standard at the expense of those who lost their jobs.
Neumark emphasizes that more research is needed to determine whether living wages
are more effective at reducing poverty than other measures, such as the earned-income
What's already clear, Neumark says, is that living wages, which focus on impoverished
workers, are more effective than across-the-board increases in the minimum wage.
Minimum wages don't target the poor very well, he contends, because much of the
benefit flows to teenagers from middle-income homes who work part time at the Gap
or Wendy's. Living wages, however, target the poor quite effectively. Many businesses
have found that the productivity gains, lower turnover and greater loyalty that
accompany higher wages help offset the costs to employers. A study by the San Francisco
department of public health concludes that the increased income should have a buoyant
effect on the health of low-income families and their children's education.
The city that boasts the longest experience with a living wage is Baltimore, where
members of BUILD, an association of local religious and community groups, found
in 1992 that some 30% of soup-kitchen attendees tended to have jobs. But the jobs
didn't pay enough to give them a ladder out of poverty. The federal minimum wage
was in the middle of a decline in its buying power, from a 1968 peak of $1.60, which
is equivalent to $8.17 in today's dollars, to its current level of $5.15. The community
organizers teamed up with union muscle, and after two years of lobbying, a living-wage
law was passed. "When you start doing this work, you don't know that you're
beginning a movement," says Jonathan Lange, a BUILD organizer. "That was
a lesson to us."
Activists are hopeful that Maryland will be the first to create a statewide living
wage, especially now that influential Montgomery County is expected to pass a $10.50
wage for service contractors this month. In spite of the county's relatively high
median household income of more than $75,000, a fifth of its public school students
are poor enough to qualify for subsidized meals. An average two-bedroom apartment
rents for $1,000 a month in Montgomery County, and so is affordable to a minimum-wage-earning
couple only if they work a combined 100 hours a week. Says Phil Andrews, the living-wage
bill's champion on the county council: "You can't get at the issue of poverty
without addressing wages."
Patricia Alston, who works at a Baltimore catering company, would agree. Seven years
after that city's living wage was enacted, she has had her first beach vacation
and is poised to become a homeowner. "The living wage contributed a great deal
to my ability to get the house," she says. Like Jerome Gibbons, the Los Angeles
airport worker, Alston has seen her job transformed from a dead end to a vehicle
of hope. For all the costs and uncertainties of the living wage, that may be the
strongest argument in its favor.