Living Wage Ordinances: A Growing Movement?

By Furdell, Phyllis | Nation's Cities Weekly, July 2, 2001 | Go to article overview

Living Wage Ordinances: A Growing Movement?


Furdell, Phyllis, Nation's Cities Weekly


Living wage ordinances, which require that workers be paid a minimum wage that reflects local living standards, are being considered in many cities across the country. There are currently 53 living wage ordinances in effect in the United States, mainly in cities but a few applied to counties or school boards. About 70 additional living wage campaigns are now underway

The current living wage movement is an effort to reduce poverty thorough local legislation. It is a local response to the fact that the current federal minimum wage does not provide enough for an individual to live on, much less an individual with a family to support.

There is a wide range in the scope of living wage ordinances. The most common is the living wage ordinance that applies only to city contractors. An example is the city of Baltimore, where any contractor that provides services to the city must pay its employees at least $7.90 an hour. Detroit's living wage ordinance ($8.83 with benefits) applies to city contractors and recipients of subsidies, including nonprofits. Pittsburgh's ordinance of $7.73 with benefits applies to city employees, city contractors, recipients of subsidies, and businesses and contractors receiving tax breaks or other assistance from the city.

The most extensive ordinance being considered to date is that of Santa Monica ($9.45 with benefits), which, if passed, will apply to all businesses with 50 or more employees in the city's tourist center, in addition in to companies doing business with the city or who receive grants or subsidies from the city.

In a recent paper, "Full-Time Workers Should Not Be Poor: The Living Wage Movement," William Quigley, Loyola University professor of law, notes, "For the foreseeable future, the only real opportunity to implement a living wage, a wage sufficient for workers to support their families, lies in the tireless efforts of the living wage movement."

Many economists, however, are challenging the effectiveness of the living wage ordinance as a poverty reduction tool. These challenges were presented at a recent symposium, "Living Wage Policy and the Entry-Level Worker," sponsored by the Employment Policies Institute, a nonprofit organization that funds research by independent academics on public policy related to low-skill and entry level employment.

The strongest argument against living wage ordinances as a tool to reduce poverty is its narrow coverage. Generally these ordinances only apply to contractors and subcontractors with a city and the percentage of workers covered is typically in the one percent range. …

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