Legitimate living wage laws
I GOT A Masters degree in philosophy from the University in 1997 and had learned so little that I stuck around and foolishly helped the Labor Action Group push for a living wage for University workers. I didn't like the fact that while I sat in a lounge reading Aristotle, the people emptying the trash can had to work second jobs, neglect their children and turn to the government for handouts to survive.
The arguments over the living wage at the University haven't changed much over the past few years. As exemplified by a column last summer by Economics Prof. Steven Stern (http://www.loper.org/~george/trends/2001/Jul/91.html) and a Cavalier Daily lead editorial April 9 ("Bury contracted living wage"), the opposition to decent wage standards continues to believe that groups like LAG are motivated by a silly urge to help others and actually are hurting those they would help.
I left Charlottesville and went to work for ACORN (the Association of Community Organizations for Reform Now), a group that promotes living wage laws. So snide digs at misguided do-gooderism certainly can be applied to me, assuming I'm misguided. But most of the people demanding a living wage nationally, including the 120,000 low-income families that make up ACORN, are acting out of their own selfish need - they want to be able to pay their bills and keep food on the table. The opposition's distaste for generosity, then, is not particularly relevant.
But what about the merits of their case? Is it possible that low-income workers are indeed misguided about what will help them and business owners can best tell them what is in their own interest? Are communities all over the country unwittingly hurting themselves by demanding living wage laws?
In 82 cities and counties there are living wage laws on the books, the oldest from 1994. Many of these localities recently have expanded these laws to cover more workers (as in Oakland, Calif.) or raised the wage level (as in Boston, Mass.). None have found any truth in the dire predictions of job loss and high costs to the governments. According to "The Living Wage" by Robert Pollin and Stephanie Luce, the federal minimum wage has been around for decades and its level has never correlated in any way with the unemployment rate.
The reason many businesses and groups like Responsible Wealth support living wage standards is that they are good for business, a point that has been made by columnists for Business Week, Craine's Business Journal, and the New York Times. When workers can quit second and third jobs, take care of their health, and get to know their families, turnover plummets and productivity increases. When more money is in circulation in a community, local retail businesses benefit. And when the government no longer has to provide food stamps to full-time workers, taxpayers come out ahead.
Increased costs to cities that demand living wages of contractors have been minimal because businesses have saved through lower turnover and higher morale and through simply sharing a bit more of their profits with their employees.
ACORN recently won a higher minimum wage for all employers in the City of New Orleans, and a group of hotel and restaurant owners took us to court predicting businesses would be hurt and flee the city. On March 25, the Civil District Court for the Parish of Orleans issued a six-page ruling calling these claims "biased," "speculative" and based on "no specific study." The court upheld the increase, giving weight to a thorough economic study (available at www.acorn.org) that predicted benefits to workers, businesses and government.
Stern proposed that instead of paying a living wage, a university or government should subsidize worker training. I haven't seen anything further on this from Stern and I consider this a hypocritical argument against living wage laws, not a serious proposal. Front groups for hotel and restaurant owners, in a similar manner, push the Earned Income Tax Credit as an argument against living wages, but spend no energy actually promoting the EITC. The Cavalier Daily's Managing Board, in its lead editorial, suggested the government take care of full-time workers by means of food stamps, EITC, and Temporary Aid to Needy Families (apparently unaware that full-time workers do not qualify for TANF). The problem with all these proposals is that workers prefer to be paid for their work. And if you ask taxpayers, can you guess what they prefer?
Unobservant economists like Stern believe their theories prove that living wage laws won't work, despite the fact that 82 cities and counties have found them to work in the real world - the unemployment and high costs to localities predicted have never materialized, while benefits to workers and local economies are prevalent. When Stern's comments venture outside his ivory tower they border on the absurd, such as claiming that he knows a worker who supports a family on $3 per hour.
Some have actually argued that the University has no business meddling in the affairs of its contractors. But the University's contracts are lengthy documents "meddling" in a wide range of issues. Businesses that don't like those contracts are free not to bid on them. If you accept that the University can determine what to pay direct employees, you have to accept the same standards for outsourced workers - otherwise there are likely to soon not be any direct employees, rendering wage standards for them meaningless.
(David Swanson is communications coordinator for ACORN.)