Living Wage Works

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Labor and community campaigns demanding that cities require municipal contractors to pay employees a living wage are gaining momentum nationwide. Measures are pending in Boston, Chicago, Houston, Los Angeles, Minneapolis, and New Orleans. But they are facing increasingly effective opposition from officials and business interests.

Opponents recently defeated ballot initiatives in Missouri and Montana and quashed a proposal in Denver. In Albuquerque, the city clerk’s office derailed a living wage campaign by disqualifying 1,000 of the signatures on election petitions. ACORN is challenging this ploy in court.

But a new study evaluating the impact of Baltimore’s 1994 living wage ordinance debunks critics’ claims that the living wage would greatly increase contract costs, lead to layoffs and alienate business.

Issued by the Preamble Center for Public Policy, a year-old Washington-based organization, the study says that Baltimore’s contract costs did increase last year-but by only one-quarter of one percent. The cost of enforcing the law were minimal–17 cents per taxpayer. There were no layoffs due to higher labor costs.

In fact, contractors told researchers the living wage requirement “levels the playing field” and “relieves pressure on employers to squeeze labor costs in order to win low-bid contracts.”

Finally, the study rebuts the charge that a mandate to pay above-poverty-level wages will cause capital flight, an argument Mayor Giuliani cited when he vetoed New York’s living wage legislation last year, which was later overridden by the City Council. In Baltimore, the value of local business assets, which had declined for the previous four years, increased 4.6 percent since the law’s passage.