Living Wage Ordinances in the Public Sector

Article excerpt

Two key efforts in the United States wage movement attempt to assist low-income families in freeing themselves from poverty by increasing their incomes. The first involved the enactment of a minimum wage. That the goal of minimum wages is to raise incomes of low-wage workers so as to reduce poverty has been forcefully argued by Senator Edward Kennedy--a perennial sponsor of legislation to increase the minimum wage who was quoted as saying, "The minimum wage was one of the first--and is still one of the best--anti-poverty programs we have." (1) At the outset of the 20th century individuals and pro-labor organizations lobbied for a "just wage," "fair wage," "subsistence wage," or "minimum wage" (such terms are frequently used interchangeably). (2) This quest for wage reform turned to a fight for a legislated minimum wage and, ultimately, to the passage of the national Fair Labor Standards Act in the 1930s. (3) Initially, the act was quite restrictive with respect to what employees were protected, but today coverage is now nearly universal. Numerous states have at times imposed a higher minimum wage than today's $5.15 per hour. For example, as of January 1, 2004 the highest state minimum wages were Washington ($7.16), Alaska ($7.15), Connecticut ($7.10), and Oregon ($7.05). (4)

The second effort in the wage movement involved the development of a living wage at local levels and is a more recent innovation. Demands for governmental intervention in the labor market periodically have arisen in response to poverty and inequalities brought about by socioeconomic change. Recently a number of books have addressed issues of the working poor and how laws at (chiefly) the city and county levels can be designed to assist these individuals not only in terms of a higher minimum wage but also with respect to medical coverage. (5) Collectively, these local wage campaigns have emerged under the rubric of "living wage" statutes. A living wage involves local legislation that requires employers to pay a certain wage above the federal or state minimum wage level under predetermined conditions to a specific set of employees. In general, beneficiaries include employees of contractors or subcontractors with city service contracts or those businesses that have received economic development subsidies or financial assistance from cities or other governmental entities. (6) Living wage mandates differ from a traditional minimum wage in that the living wage is, at least theoretically, tied to meeting some standard of living and only applies to employers who receive some benefit from the government. The goal of living wages, like that of minimum wages, is to raise incomes of low-wage workers in order to reduce poverty. For example, the Economic Policy Institute, a nonprofit, nonpartisan think tank that seeks to broaden the public debate about strategies to achieve a prosperous and fair economy, stated, "The living wage is a crucial tool in the effort to end poverty." (7)

A History of Living Wage

In 1994, Baltimore, Md. was the first major United States city to pass a living wage ordinance, followed a year later by ones in Milwaukee, Wis., and by Santa Clara County, Calif. A total of 31 ordinances were passed between December 1994 and July 1999. By mid 2004, according to the Association of Community Organizations for Reform Now's (ACORN) Living Wage Resource Center, (8) there were 120 entities (cities, counties, school boards, colleges, and universities) with living wage policies. ACORN also reported that initiatives were underway in 118 additional cities, counties, and universities, such as Little Rock, Ark.; Jacksonville, Fla.; Atlanta, Ga.; Richmond, Va.; Knoxville, Tenn.; the University of Pittsburgh, Swarthmore College, and Valdosta State College. (9)

Such ordinances require wages to be paid based on some definition of need; that is, a wage that is commensurate with workers' needs as consumers. (10) A needs-based or consumerist understanding marks a departure from a more traditional one that asserts workers may expect wages corresponding to the value of the product(s) or service(s) they produce. …