New Rules Project - Equity

Living Wage

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.

RULES

Living Wage for Employees of Large Retailers - Chicago, IL
On July 26, 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. The living wage component is set at $9.25 in 2007 and rises to $10.00 by 2010 for employees at big-box stores like Wal-Mart, Target, Toys R Us, Lowe’s, and Home Depot. More...
Living Wage - Detroit, MI
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, currently $8.83 an hour.
Living Wage - Minneapolis, MN
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.
Living Wage - Oakland, CA
Approved in March 1998, this ordinance 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 wages are adjusted annually.
Living Wage - St. Paul, MN
In January 1997, the 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. At least 60% of new jobs created as a result of such assistance must go to St. Paul residents.
Living Wage - San Francisco, CA
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.
Living Wage - Santa Fe, NM
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. More...
Living Wage - Santa Cruz, CA
In October 2000, the 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 will be paid $11 per hour with health benefits or $12 per hour without.
Living Wage - Santa Monica, CA
The city council will likely pass an ordinance in June 2001 to establish a "living wage" of $10.50/hour applicable (up to $13.00 by 2003 in no health coverage). The ordinance is unique in that instead of applying to city contractors or companies that receive economic development money, it applies only to businesses with $5 million or more in revenues that are located in the city's coastal and downtown tourist areas.