Life used to be very hard for Marlene Mendoza. The single mother worked as
a waitress at Los Angeles International Airport. At $5.50 an hour, she says she
had no choice but to put in 80 hours a week.
Today, life is still hard. But under a 1997 city law that provided wage increases
for certain employees, Mendoza now works 50 to 60 hours a week. She is paid more
than $7 an hour, allowing her to cut back and spend time helping her son, Frankie,
10, and daughter, Valerie, 8, with their homework.
"I work a lot less," she says. "I can be with my children much more."
Mendoza has benefited from the living-wage movement, a grass-roots effort by
activists, labor unions, religious leaders and other groups to provide lower-income
workers with better pay.
The concept has been around since at least the early 1990s, but never before
has it affected so many workers in so many cities and counties across the USA.
Even though some economists estimate that fewer than 1% of employees in living-wage
communities are covered, those on both sides of the issue agree that tens of thousands
of workers are receiving higher pay because of the initiative.
The once-fledgling movement is making major inroads. More than 80 communities,
including Boston, Baltimore, Detroit and Chicago have laws requiring government
contractors and some other employers to pay workers more. The patchwork of legislation
is circumventing the $5.15 federal minimum wage, and supporters are setting their
sights on statewide wage hikes, as well.
The drive for a living wage is arguably the most successful organizing tool
and rallying point for labor unions in decades. The cause is helping revitalize
the labor movement, which for years has struggled just to hold onto membership
and benefit gains.
The living wage is bringing new supporters into the fold and harkening back
to labor's original goal of championing workers and bringing about lasting gains.
But that concerns opponents, who suspect the movement could mark the first
thrust in a threatening, anti-business organizing push.
Wage laws are a costly burden for business, they say, that ultimately hurts
workers by forcing companies to rein in hiring.
"This is an organizing movement that had exceeded ... supporters' dream, and
they've now become emboldened to go for more," says John Doyle at the Employment
Policies Institute, a research group based in Washington. "But there will be businesses
that can't pay it or will have to go out of business. It will hurt workers and
displace them from jobs."
The stakes are high. Living-wage debates are spurring petition drives and court
cases and packing city council meetings around the country. Though ordinances
vary, the overall ground rules are the same:
- Living-wage ordinances, passed by referendums or legislation, require certain
employers to pay wages higher than federal or state minimum wages.
- Employers covered by the ordinances are those firms that receive local government
contracts. Some also cover firms that get tax breaks or subsidies.
- Often, the employer must pay those higher wages to employees only during the
lifetime of the government contract.
- Typically, the wage rate set is what it would take to bring a family out of
poverty (which is about $18,000 for a family of four, according to the Department
of Health and Human Services.) That means covered workers would generally receive
more than $8 an hour. The federal minimum wage was last raised in 1997.
Sen. Edward Kennedy, D-Mass., is spearheading an effort in Congress to raise
the minimum wage by $1.50 by 2004.
The minimum wage has lost 10% of its buying power since it was last raised,
according to the Economic Policy Institute. In 1997, the minimum wage stood at
about half the median wage, but it had fallen to 40% of the median in 2001.
"This is about using public services to raise the standard of living," says
Madeline Janis-Aparicio, executive director of the Los Angeles Alliance for a
New Economy, which has worked to enact living-wage laws in areas of California.
"(Employees) are struggling to buy food and health care, even though they're working
Critics worry about trend
What really alarms opponents is that living-wage laws are getting bolder —
in some cases extending coverage to more employers than those who receive government
dollars and mandating higher wages than $8 an hour.
An ordinance in Santa Cruz, Calif., mandates that city contractors pay up to
about $12. In New Orleans, a referendum approved by voters would make most companies
in the city — not just contractors — pay $6.15 an hour. (The requirement
is under review by the Louisiana Supreme Court and has yet to go into effect.)
In Santa Monica, Calif., a law would make hotels, restaurants and some other
businesses in a geographical tourist zone with annual revenue topping $5 million
pay at least $10.50 an hour. That law is on hold pending a referendum.
Opponents fear the broader laws are an ominous trend.
"My objection is the issue of fairness," says Tim Dubois, CEO of the Edward
Thomas Companies, which owns hotels in the Santa Monica tourist zone. "We have
to pay a different wage level than anyone else. It violates every economic principle
you can think of. If I can't compete, my employees will have fewer customers and
be hurt in the long run."
The concern: Higher wages will displace lower-skilled workers from the labor
market because employers who pay more will demand more experienced hires.
In cities such as New York, critics fear that higher wages will prompt employers
to flee. A bill under consideration by the New York City Council would require
city contractors and companies that receive sizeable tax breaks to pay $8.10 an
hour to employees who get health benefits, increasing to a maximum of $10 after
five years. An estimated 80,000 workers would be affected.
"We're trying to induce firms to stay in the city," says Kathryn Wylde, president
and CEO of the New York City Partnership, which represents businesses. "If New
York needs the jobs, the idea is to make it as easy and streamlined for firms
as possible. This is a mixed message."
Don't tell that to Ayanna Williams, who works 30 hours a week providing child
care in New York and earns about $7 an hour. It's hard work, she says, and pays
barely enough to cover her $600-a-month rent, plus groceries and utility bills.
Williams wants better wages, and she thinks it's up to the city to make sure workers
"I live paycheck to paycheck and care for my mom. It's killing me," says Williams,
22. "With a better wage, I'd put down something for savings. I want to go to school.
To have a better wage, it would open the door for me to better myself."
And don't tell that to Dianne Guindon, a child-care worker in Santa Cruz. She
used to make $9.25 an hour. Living-wage legislation pushed that to about $11,
and a raise means she makes $12.25.
"The living wage means I can do this job that I love. Instead of working eight
hours and getting exhausted, I work 41/2 hours a day," says Guindon, 34. "It allows
me to work in a field that is my first choice, and (employers) get quality employees."
Does it hurt or help?
The crux of the debate comes down to fierce disagreement about whether a living
wage hurts or helps. It doesn't help that research on the issue often results
in contradictory findings.
Living-wage laws do cause job losses, according to a widely touted March report
by Michigan State University economist David Neumark. But the research also found
that living-wage laws lead to pay increases that can outweigh those losses, leading
to a modest decrease in family poverty. One finding: A living wage that's 50%
higher than the state's minimum wage will raise the average wage of low-income
Others researchers have found similar mixed results. Robert Pollin, an economics
professor at the University of Massachusetts, found a living wage does cause some
lower-wage workers to be displaced from jobs.
"That is a legitimate concern," says Pollin, co-author of The Living Wage:
Building a Fair Economy. "But the overall effects of higher wages and
benefits overcome that."
Kebede Woldesenbet agrees with that finding. The 72-year-old parking attendant
in Alexandria, Va., says a living-wage law there is lifting him out of poverty.
Before, he earned $6.50 an hour; today, it's more than $10.
"The living here is very tough, I tell you. The prices, even food, are getting
higher, but wages weren't increasing at all," Woldesenbet says. "I can't tell
you how much we were suffering, and now, we're getting better."
Though the laws lead to higher costs for businesses, employers are also divided
about the movement. Take Barry Hermanson, who runs Hermanson's Employment Services
in San Francisco. He says the higher wages mean less turnover and more company
loyalty, which ultimately helps retain clients.
"The business gets the benefits from better customer service," he says. "And
it's a good thing for business to pay people a wage they can live on without resorting
to charity or public subsidy."
But to many, a living wage is anti-business and a coup for unions.
"This is part of a union strategy to push non-union workers off the market,"
says Robert Lawson, an economics professor at Capital University in Columbus,
"It's hard to tell how far this will go. The fear is what will happen if the
idea takes off. That could be much more damaging."
City governments have been getting away from using more costly union labor
by hiring non-unionized contractors. Critics say living-wage laws prod municipalities
back into hiring union workers because the playing field is more level.
Union leaders say the living wage is vital to addressing what they see as a
failure to boost the federal minimum wage.
Says AFL-CIO's public policy director Christine Owens: "While it's not easy
to mobilize people at the local levels, it's easier than to organize nationwide."
Supporters vow to continue their efforts. They say this is laying the organizational
framework to begin pushing for other social justice issues such as affordable
housing. The living wage is just the first salvo in what promises to be a long
and intense battle.
"In 10 years, there's going to be some form of living-wage ordinance in every
city in the country," says Wade Rathke, a chief organizer in New Orleans with
the Association of Community Organizations for Reform Now (ACORN). "As long as
Congress defaults on the minimum wage, you'll continue to see community organizations
and unions trying to figure out some solution."
© Copyright 2002 USA TODAY, a division of Gannett Co. Inc.