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Should the Law Mandate a Living Wage?

By · December 19th, 2002 · Three Way
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Thomas Beridon

Executive vice president, Hamilton County Young Democrats

The simple answer to the question posed above is yes, there should be a living wage mandated by law.

A "living wage" ordinance such as the one before the city of Cincinnati requires that wages be equal or greater than that of the federal poverty guidelines for a family of four. The goal is to reduce the number of workers dependent on government poverty programs such as Section 8 housing vouchers, while supplying motivated individuals to the workforce.

In a motion sponsored by Council Member John Cranley, Cincinnati City Council recently asked the city administration to draft an ordinance requiring that city agencies and any agencies working on behalf of the city of Cincinnati pay a living wage of $8.70 per hour with benefits or $10.20 an hour without benefits.

While the requested ordinance does exclude certain positions within the city, it is a step in the right direction for a city that is wrongly considering privatization of some of its city services.

Critics of living wage warn that it will have a negative impact on cities that enact it by creating a hostile business environment. It has not been demonstrated that the presence or absence of a living wage law is a defining factor in job loss, higher contract costs or a hostile business climate. Factors impacting those conditions are much more far-reaching than that, and we cannot simply point to a living wage requirement and say, "This is why."

In fact, living wage ordinances can be key factors in worker retention, standard of living and other primary issues considered by a business when deciding where to locate or re-locate.

A living wage, mandated by law, would bring business and government in-line with the basic principle that our taxes don't pay to keep people in poverty.

Alyson Steele

Spokeswoman, Cincinnati AFL-CIO Labor Council

Should living wages be mandated by law? We had a federally mandated living wage between 1938 and 1981, but we called it the minimum wage. When the Reagan Administration refused to raise it, it lost much of its value and is no longer livable.

Its value looks like it will only drop further, aggravating what is already a bad situation for minimum-wage workers.

The minimum wage intended to keep a full-time, year-round worker out of poverty now keeps a family of three 20 percent below the poverty line. It has become necessary that our local governments take other measurers to protect the economic well being of our communities.

Living wage requirements are the measures being taken in communities across the country. These requirements affect businesses and contractors doing business with the local government. They pave an economic high road to improve the living standards for workers and their communities and ensure that taxpayer dollars stabilize the wage floor rather than undercut wage rates.

Living wage is essentially an economic development issue. To subsidize a race to the bottom by allowing contractors to cut wages to lower costs keeps wages at such a low rate that it damages the economic health of the entire community. Businesses are not attracted to poverty-ridden areas with a low standard of living, and that is what you get when workers don't make enough to live on.

Government certainly has the right to make rules in regard to its contracts that will raise the standard of living in the jurisdiction it governs. Living wage is one such rule, and these ordinances are a responsible use of taxpayer money. Not only should they be mandated by law, but it would be irresponsible not to do so.

Heather E. Harlow

Chair, Blue Chip Young Republicans

"Should 'living wages' be mandated by law?" Absolutely not!

Living wage is just a way for overpaid politicians to feel good about themselves by overpaying low-skilled workers in an attempt to buy their votes. They disregard the long-term economic problems this will cause for their local government.

Since our city's budget is not unlimited, to say the least, just how will these higher wages be funded? Raise taxes? Fewer city projects?

If fewer city projects occur, there will be fewer jobs. But the folks who do those fewer jobs will get higher pay. Is that somehow supposed to make up for those who are now without a job?

Or what about those who now have a higher hourly rate but are working fewer hours? Not only is work potentially not getting done, but also the employee could be making less than before the ordinance.

Let's get back to the "raise taxes" effect. Living wage ordinances come at the expense of taxpayers and will only compound our city's problems with attracting middle- to high-income people and businesses.

Generally, the unions support living wages. That way they don't have to worry about their jobs being privatized if the private sector is forced to pay a higher rate and makes the contractors less likely to bid in the first place. Double whammy here -- not only are the businesses suffering through higher taxes, but they can't afford to bid on city jobs, which they might have in the past.

Living wage proponents say that these ordinances will help to fight poverty. Michigan State University economists David Neumark and Scott Adams (www.msu.edu/~neumarkd/Old/livwgpap.pdf ) studied the effects of living wage in light of Detroit's ordinance and have found this to not be the case. If living wage ordinances have any affect on the poverty level, it is a negative effect -- living wages have actually increased the poverty rate where they have been adopted.

In the last column I wrote in this space, I talked about my grandfather's immigration to America and some of the hardships he, my grandmother and my mother endured their first few years here. "Opa" was a brick and stonemason, and when he first started his own business, earning less than minimum wage -- not even a "living wage" -- he paid his workers an honest wage for an honest day's work. Hard work. He and his fellow workingmen are spinning in their graves over this.



Each month, CityBeat poses a question to young leaders in the local Democrat and Republican parties as well as a selected third party or independent activist.
 
 
 
 

 

 
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