The Outlook
SAN FRANCISCO - The modern movement for a "living wage" began in Baltimore in 1994, but it is poised to reap its biggest gains in California next year.
San Francisco, Santa Monica and several smaller cities in the Silicon Valley are considering living-wage ordinances that would match or exceed San Jose's record-breaking $10.75 an hour enacted last year -- more than double the federal minimum wage of $5.15, and enough to lift a family of four above the poverty line.
The success of living-wage campaigns in California reflects a national trend borne aloft, organizers say, by the economic boom. Prosperity has highlighted social inequities that campaigners use to argue for giving the working poor a boost, too. And by limiting coverage of the living-wage proposals to workers employed by local governments and public contractors, proponents have avoided the most contentious business groups that bitterly oppose raising minimum wages across the board.
"We're in this humongous boom, but the growing income gap is wiping out the middle class," says Carol Zabin of the Center for Labor Research and Education at the University of California, Berkeley. California state officials expect 39% of all jobs created by 2005 to be unskilled, she says, with 35% of all new jobs paying less than $10 an hour. "Now people are saying it's not enough to produce just any job, especially with government subsidies. We need to be concerned about the quality of those jobs."
Concern about job quality has spread amid the recent prosperity, proving the economists' saw that people are much keener to help the disadvantaged during good times than bad, if only, perhaps, to stave off resentment. In all, living-wage advocates have won ordinances in 42 cities and counties across the country -- with proposals pending in about 80 more.
Their plea has been modest but effective: That businesses which benefit from public largess should pay their workers at least enough money to keep them out of poverty.
Economists feud over the effects of higher minimum wages. Conservatives have long maintained that raising the minimum wage makes small businesses unprofitable and reduces job opportunities for workers with the lowest skills. But in recent years, researchers have found little evidence to support that view.
Robert Pollin of the University of Massachusetts at Amherst found that Los Angeles's $8.64 living wage increased total costs for the average affected business by only 1% to 1.5%. In a study of New Orleans, he found a proposed $1 increase in the local minimum wage, to $6.15, would increase business costs by a total of 5% or more for just 207 of the city's 14,000 businesses.
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Top Living Wage Cities
San Jose, Calif. $10.75* Detroit 10.44 Cambridge, Mass. 10.00 Ypsilanti, Mich. 10.00 Maimi-Dade County, Fla. 9.81 Los Angeles County, Calif. 9.46 San Antonio, Tex. 9.27
*Hourly Wage without benefits
Source: Employment Policies Institute
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Such findings have helped to embolden advocates for the poor, who contend that the living-wage movement is just the start of a broader campaign for "economic justice."
In San Jose, the coalition of unions, religious groups and social-welfare activists that pushed through the living-wage law has a lengthy agenda. In February, it plans to unveil a "code of conduct" for employers of temporary workers in the Silicon Valley, including demands for living wages, portable benefits, job training and fair administrative treatment. After that, it plans to promote a "community economic blueprint" that will seek to hold governments and companies more accountable to the community for the billions of dollars in public subsidies spent on development.
"The issue of economic justice is the civil-rights issue of our day," says Amy Dean of the AFL-CIO in San Jose.
In Minnesota, passage of living-wage laws in Minneapolis and St. Paul led to a successful campaign to pass a broader corporate-accountability law at the state level. The statute requires companies seeking economic-development subsidies to show how their project will benefit the community in jobs and wages. Each city can set is own wage goals. Under the law, all local subsidies of $100,000 or more, and all state subsidies of $500,000 or more, must be approved by a publicly elected body.
"The big picture isn't the individual workers being covered by living-wage laws," says Jen Kern of the Association of Community Organizations for Reform Now in Washington. "It's the organizing; ... it's the new coalitions being built."
Does the living-wage movement have legs, or will it fade with the next downturn? Campaigners and some economists insist the broad success of the movement proves living wages are becoming an accepted "right." But when times do turn tougher, economists say, business groups are likely to find much more receptive audiences for their argument that higher minimum wages squelch job creation.
In the end, much may depend on what happens in California, where the highest living wages are now being won. If they prove successful at helping the working poor escape poverty, with relatively little harm to local economies, living wages are probably here to stay.
--Peter Waldman