Finance Highlights 2006 1206 - Laserfiche WebLink

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" ~ John Jennanis January 8, 2004 California cities (Los Angeles, Oakland, Sacramento, San Jose, and San Francisco) have living wage laws on the books, as do at least 21 other California cities. The initial focus of living wage legislation was very narrow. Living wage laws adopted in Milwaukee County and New York targeted a very small percentage of workers, particularly low- wage earners such as janitors and security guards, who were under a government contract to provide services. By 1998 the legislation expanded to cover a larger group. Detroit's 1998 living wage applied to any business or nonprofit that received a government contract or any firm receiving $50,000 or more in economic development assistance. San Francisco's living wage law expanded from firms with a City contract to all workers at the City's airport, on the grounds that the businesses leased land from the City. In recent years, living wage proponents in some cases have proposed additions to subsistence wage rate requirement to include mandated health benefits, vacation days, and in some cases union organizing. Living wage ordinances are far from universal. They vary considerably in coverage and scope. Many of these laws apply the requirement only to contracts over a certain dollar amount or to companies with a minimum number of employees. Laws may specify that the higher payment only needs to take place when an individual is performing the publicly funded work. Under some laws, the jurisdiction may exempt individual firms or provide an appeals process to enable a firm to appeal their compliance with the law. In many cases, nonprofit agencies are exempted from the living wage legislation. Living Wage Arguments Nationally, one major citizen activist group, the Association for Community Action (ACORN), and two economic policy institutes, the Economic Policies Institute and the Employment Policies Institute, have taken positions on living wage issues. The Employment Policies Institute is the only one of the three to hold a position against living wage legislation, preferring a more targeted approach to help low-income families. Proponents of living wage requirements argue that three main benefits arise from this type of legislation. First, a living wage will allow people who work for a living to move out of poverty. Second, a living wage law provides accountability for companies that benefit from public funds. Proponents argue that the public is often comforted by the fact that government spending is making a difference to the people who live in the community and not simply a benefit to the firms who win a government contract. Third, a living wage law establishes a level playing field for public contract bids. Firms cannot win contracts for traditionally lower paid service jobs due to the inability to undercut price through reduced employee wages. Critics of living wage legislation argue that living wage laws will result in several negative consequences for a community. First, the legislation will weaken the business climate by creating additional government impediments to business. Business groups argue that it is outside the purview and responsibility of any local government to establish wage standards for employers. They argue that State and federal minimum wage and prevailing wage laws already govern this arena. Second, opponents argue that the increased wage floor will primarily benefit those already employed and will result in either job loss or slower job growth as firms only will