A campaign to raise the minimum wage to a “living wage” has been waged in cities around the country with great success. Over 100 cities and counties have passed a living wage law of some sort. Generally, these laws require that businesses that have contracts with the city provide a specified wage and benefits package that is higher than the federal minimum (one city, Santa Fe, New Mexico, has gone further, adopting a minimum wage for all businesses with more than 25 employees). Living Wage laws tend to be the result of campaigns fought by community groups like ACORN, churches and labor unions.
Municipalliving wage ordinances vary in their provisions. According to ACORN, living wage laws range from $6.25 (Milwaukee County) to $12.00/hour(Santa Cruz, assuming employer doesn’t pay health benefits, otherwise$11.00/hour). A wage of about $8.25 is necessary for a full time worker to earn above the federal poverty level for a family of four. Some laws cover employees working on city contracts, while others extend to workers in firms receiving municipal subsidies or tax abatements. Several cities index the wage to the Consumer Price Index. Others stipulate that a percentage of new hires live within the community.
Criticsof living wage laws argue that they eliminate jobs, hurt the economy and are ultimately subsidized through higher local taxes. However, studies show the impact on the economy has been limited. Robert Pollin, author of the book “The Living Wage: Building a Fair Economy” and a professor of economics at the University of Massachusetts at Amherst studied the impact of the 1997 Los Angeles living wage ordinance and concluded that it boosted costs about 1 percent for the businesses affected.
Across the nation, cities, counties and other local governments are adopting living wage ordinances to help working families get a decent standard of living. While the details vary, these ordinances seek to insure that the employees of public contractors or corporations receiving public financial assistance, and public employees earn at least a poverty level wage. Some have gone beyond this bare minimum to offer higher wage rates, incentives for employers to provide health insurance, and paid time off for sick leave and vacations.
ACORN has a nice Compilation of Living Wage Policies on the Books.
In March 1997 the city council unanimously passed a living wage policy requiring businesses benefiting from $100,000 or more in city assistance in one year to pay employees a living wage. The wage will be defined and indexed as 110% of the federal poverty level for a family of four. Recipients of such assistance must also set a goal that 60% of new jobs will be held by city residents. Additional provisions prohibit privatization of services currently performed by city employees that would result in lower wages, and preferences for assistance to union-friendly businesses.… Read More
In February 2003, Santa Fe, New Mexico enacted a minimum wage ordinance. Beginning January 1, 2004, the ordinance will require an $8.50 per hour minimum wage for all businesses and nonprofit organizations with 25 or more employees. The wage will rise to $9.50 per hour in 2006 and $10.50 per hour in 2008. Tips earned by employees can be counted towards the minimum.… Read More