2-24-06, 9:49 am

Since the mid-1990s, living wage supporters have campaigned for local laws requiring firms to pay their employees wages above the minimum wage when they do government business or receive public subsidies. The philosophy of the living wage movement is simply that people ought to be paid enough to meet their basic needs, such as shelter, food, transportation, health care, clothing, and other supplies essential for survival.

The minimum wage doesn't help families meet their basic needs. Republicans in Congress have blocked efforts to raise the minimum wage above its current poverty level of $5.15. Employers rarely take the initiative to pay living wages on their own. Since 1994, in response to the national wage crisis, more than 120 communities from Baltimore to Los Angeles, Hartford, Connecticut, Ypsilanti Township, Michigan, and Multinomah County, Oregon have passed some version of a living wage ordinance tied to public employment, public contracts, and subsidies or investments that benefit private employers.

While the political right is ideologically pre-disposed to opposing living wage requirements, corporations that benefit from public contracts and subsidies and workers who have seen some stabilization of their living standards as a result of living wage laws have a more positive reaction. The ideologically driven opposition argues that living wage laws endanger city and municipal budgets, have little impact on working families, and hurt businesses and jobs.

A recent report from the non-partisan Economic Policy Institute shows that numerous studies indicate that these claims are not based in actual experiences.

According to the authors of 'The Economic Impact of Local Living Wages,' Jeff Thompson and Jeff Chapman, 'living wage laws have small to moderate effects on municipal budgets.'

Citing a survey of 20 cities that have adopted some version of a living wage ordinance, the authors note that the actual budgetary effect of living wage laws 'tended to be less than one-tenth of 1% of the overall budget.'

Specifically, two separate studies that followed the effects of Baltimore's living wage on that city's contracts found that costs increased less than the rate of inflation. In Los Angeles, no measurable effect on costs was discovered. An examination of several New England cities that have adopted living wages found that costs rose in only a single city.

While cities have not been hurt by these living wage requirements, working families have seen concrete benefits. Surveys in both Los Angeles and Boston have shown that more than 95% of the workers positively affected were adults, and the vast majority were full-time workers. This group was also disproportionately composed of African Americans, other minorities, and women as well. Similar statistics were reported in San Francisco.

The same studies showed that prior to mandated wage increases, large majorities of the workers who were affected were not earning enough to meet a 'basic-needs' budget, and many others were on the borderline. Further, lack of job training and strong educational backgrounds for many living wage workers meant that few could simply go out and find better paying jobs.

Regarding the effect on employment, while living wage ordinances have a mixed record, studies show that the results have been a far cry from the doom and gloom predicted by opponents of living wage laws. 'Most of the available studies have concluded,' says the EPI report, 'that there have been either no or only small employment losses as a result of adopting living wages.' For example, Baltimore and Boston report that their living wage laws have not caused job losses. Job losses in Los Angles did occur but only affected 1% of workers who received a raise. In San Francisco, some job sectors affected by the living wage requirements, such as airport screeners and home health care workers, actually saw increased employment.

The effect on businesses that receive public contracts has also been positive. Workers who receive low wages have higher rates of job dissatisfaction, so turnover and absenteeism create higher costs for job training and other replacement issues for businesses. With living wage ordinances, however, cities have seen lower rates of employee turnover and absenteeism, In San Francisco, for example, airport screeners saw hourly wages grow from $6.45 to $10 per hour as a result of new living wage laws, and their turnover rates shrank from 95% to 19%.

Because increased productivity and lower turnover rates reduce costs for businesses and significantly offset the cost of higher wages, the EPI report argues that living wage increases add only moderate costs to public contracts. The massive increases in costs for communities that adopt living wage requirements, so shrilly predicted by right-wing think tanks and politicians, simply have not materialized.

At the same time as the Republican-dominated Congress refuses to address demands for a higher minimum wage and Republican ideologues fight local living wage campaigns, corporate executive pay is out of control, tax breaks for the very rich have multiplied, and corporate giveaways and subsidies that don't trickle down to working families have spiraled upward.

Meanwhile, poverty and homeless rates are growing. Health care costs are predicted to rise to about one out of every $5 spent in the US next year. Gasoline and heating costs are skyrocketing. Real wages are slipping farther behind for working families. Anti-poverty services are being stripped. The tax burden on working families has grown disproportionately. And while the rich enjoy billions in tax cuts, millions of families are slipping under the basic-needs threshold.

It's time to sound the call again for US workers to get a real raise to a living wage.



--Contact Joel Wendland at