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.
Municipal
living 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.
Critics
of 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.
At the ballot box on November 3, 1998, Detroit voters overwhelmingly
approved a living wage measure that requires city service contractors
or recipients of city financial assistance of $50,000 or more to pay
employees a wage equivalent to the federal poverty line for a family of
four.
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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.
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Approved in March 1998, this ordinance (Ordinance No. 12050) requires
companies or non-profits that enter into service contracts with the
city worth at least $25,000 or benefit from at least $100,000 in city
subsidies in a year to pay workers a minimum of $9.25 an hour ($8.00 if
the firm provides health benefits). The minimum wages were adjusted
annually. The ordinance also entitles such workers to 12 paid days off
per year. It also allows that a collective bargaining agreement may
provide that such agreement may supersede the requirements of the
living wage ordinance.
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In January 1997, the St. Paul, Minnesota, city council unanimously
passed a directive requiring recipients of $100,000 or more of city
economic development assistance in one year to pay employees a living
wage, defined as 110% of the federal poverty level for a family of
four, currently about $8.83 an hour (100% of poverty line required for
companies who provide health insurance; currently $8.03). At least 60%
of new jobs created as a result of such assistance must go to St. Paul
residents.
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On August 21, 2000, the San Francisco Board of Supervisors passed a
"minimum compensation" law that requires city service contractors,
including nonprofit agencies, and leaseholders at San Francisco
International Airport to pay workers at least $9 an hour. Wages will
jump to $10 an hour next year followed by 2.5 percent raises for three
more years. It also gives workers 12 paid days off and 10 unpaid days
for family emergencies.
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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.
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In October 2000, Santa Cruz, California's city council unanimously
passed the nation's highest local living wage ordinance. Upon
enactment, all full-time city employees and full-time employees working
on city contracts of $10,000 or more were paid $11 per hour with health
benefits or $12 per hour without.
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On May 22, 2001, the Santa Monica City Council held first reading on an
ordinance to establish a "living wage" of $10.50/hour applicable to
certain employers in a defined geographical area of the city. This came
after almost two years of community activity for and against such a
measure, including a ballot initiative defeated in November 2000 that
would have preempted Council action on the matter. In 2001 the council
enacted the ordinance. The issue was subsequently placed on the
November 2002 election ballot as a referendum item. The ordinance was
narrowly defeated by a vote of 14,830 against and 13,860 in favor.
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In July 2006 the Chicago City Council voted 35-14 to pass a new
ordinance that requires large retailers to provide employees with a
compensation package consisting of a minimum living wage and a minimum
benefits package.
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