By Fred Gaboury

People's Weekly World

www.pww.org

Living wage ordinances, providing wages that range from $6.25 an hour in Milwaukee to $10.75 in San Jose, Calif., have been enacted in over 40 localities as labor/community coalitions have fought back in the face of stepped-up drives to privatize the jobs of public sector workers.

A study by the Chicago Institute on Urban Poverty found that privatization led to compensation losses of as much as 46 percent for entry level workers. These numbers - and the fact that government bodies tend to hire and promote more minority and women workers than private employers - have meant that privatization has resulted in a disproportionate loss of relatively high-quality jobs for these workers.

Although the hourly wage varies widely, most living wage ordinances provide for a wage approximating that which a full-time worker would need to support a family of four at the poverty line ($17,690 a year or $8.20 an hour in 2000). In some jurisdictions, the wage is set at 130 percent of the poverty line, the maximum income a family can have and still remain eligible for food stamps. In addition, many living wage ordinances have provisions calling for health benefits, vacations and other "fringes," as well as setting parameters for labor relations and hiring practices.

Although living wage campaigns have met with stiff resistance, no one can doubt their impact in reducing poverty among low-wage workers. According to a survey conducted by the Economic Policy Institute (EPI) in 1999, workers covered by Baltimore's ordinance had an average household income of $13,632 and 92 percent of the workers interviewed in the survey were the primary wage earner, bringing home 68 percent of their family's income.

That their arguments always fail the test of scrutiny has not deterred opponents of living wage campaigns who continue to trot out their age-old bug-a-boos: "Who's going to pay the bill?" "Living wage ordinances have a negative impact on the business climate." "Higher wages will mean that less-skilled workers will be replaced with more highly skilled workers." "Only kids will benefit." "Government should not intervene in the marketplace."

Not so. Let's cut to the chase:

In general, the costs of living wage ordinances have been more than made up for through reduced training and recruitment costs. The EPI estimates that the annual per capita cost of administering the Baltimore living wage ordinance is 17 cents.

At this stage of the game, living wage ordinances cover less than 1 percent of the work force, hardly enough to have any effect on the economy.

According to the EPI, their study of the effects of the 1996-97 minimum wage increase "found no evidence of job loss among teenagers and adult workers with less than a high-school education, two groups of workers that typically have lower skill levels."

Adults hold 70 percent of all minimum wage jobs. The proportion of adults is probably higher among workers covered by living wage ordinances since these ordinances cover jobs like janitors, which are typically held by adults.

Those who call for a "hands off" policy by government ignore the many ways in which governments intervene in the market to help businesses through subsidies and tax breaks. In addition, programs to help the poor benefit employers, who are able to pay low wages because some (although fewer by the year) government programs help low-income families meet their needs. Thus, the burden of providing income supports and services to the working poor is passed on to the public through taxes.

That the fight for living wage ordinances needs to be combined with the fight for an increase in the minimum wage is underscored by the fact that the wages of workers in the bottom 10 percent declined by more than 10 percent between 1979 and 1997, while the number of jobs paying poverty-level wages increased from 23.7 percent to 28.6 percent during the same period.

According to the EPI, a family of four living in Baltimore requires an annual income of $34,732 "just to meet its basic needs and achieve a safe and decent standard of living." That figure isn't extravagant. In fact, the EPI said the family "would have to give up many 'unnecessary' goods that most families take for granted, including saving for education, retirement and emergencies."