EDITORIAL Cities that pay a living wage find it works
The minimum wage, raised by Congress
to $5.25 an hour in 1997, provides less than two-thirds of the $8.45-an-hour
that a 40-hour-a-week worker with a year-round job would need to lift a family
of four out of poverty. And that figure already meant a significant drop in
real income for the hourly worker as compared with his situation when the first
minimum wage law was enacted.
The current wage would need to be 50 percent higher to match the
purchasing power of $1.60 in 1968.
These figures make it clear that the federal minimum wage falls
far short of the living wage to which, according to Catholic social teaching,
every worker is entitled. And, as more concerned citizens recognize that no
significant improvement at the level of federal government is possible as long
as big-business money determines congressional votes, they are looking to other
ways to effect the changes that a sound public policy demands.
The approach that has produced the best results was first tried
out eight years ago in Baltimore. A coalition of religious and trade union
groups persuaded the city council to enact a law requiring contractors who do
business with the city to pay their workers a living wage. Similar legislation
has since been enacted in 83 cities, and campaigns are underway in more than 75
additional cities, counties, states and college campuses.
A typical ordinance requires contractors who work for local
governments to pay an hourly rate that brings the workers annual income
up to $18,000, the federal poverty level for a family of four. A city with
living costs higher than the national average may build in that factor. Santa
Cruz, Calif., for example, stipulates $12.50 an hour.
Many ordinances add other community standards, such as health
benefits, vacation days, environmental standards and language that encourages
union organizing.
Implementation of a Santa Monica, Calif., law imposing a living
wage provision on hotels and other major businesses in a tourist area on the
coast has been suspended by the courts pending a referendum to be held next
November.
Chambers of Commerce and other representatives of big business
have strongly opposed the idea of a living wage since it was first proposed.
Many small companies, they insisted, would be driven out of business by the
additional costs. The actual experience for almost a decade does not bear them
out. A study by Johns Hopkins University two years after Baltimore had passed
the ordinance showed that the citys increased contract costs had grown by
only 1 percent, which was less than the inflation rate for the period.
More recent studies at Michigan State University and the
University of Massachusetts at Amherst confirm that the impact on business has
been small. And Miami-Dade County has reported that the raises for 2,800
employees to bring them up to the living wage mandate had increased its total
budget by less than one/fifth of 1 percent.
Perhaps the most impressive testimony is that of David Neumark, an
economist at Michigan State University known for his criticisms of living wage
laws, who was commissioned by the conservative Public Policy Institute of
California to study the impact of these laws on low-wage workers and low-income
families.
Having surveyed the experience of 36 cities in various parts of
the United States from 1996 to 2000, he reached a conclusion he found
surprising. The net effect, he reported, is a modest decrease in family
poverty. Even though steep wage increases may cause some job loss, they
make it less likely that a family with a living wage worker will live in
poverty, especially in cities where the law applies more broadly.
National Catholic Reporter, August 16,
2002
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