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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 ago."
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 tax credit.
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.