Living Wage Study Exposes Empty Threats by Business
Ventura County Star - June 16, 2005
By Peter Dreier
President Bush and the Republicans in Congress keep resisting raising the minimum wage. But cities around the country are not sitting still.
In the last decade, more than 120 cities and counties have enacted living wage laws,
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At least 13 other cities, including Albuquerque, N.M., Memphis, Tenn., Phoenix, Richmond, Va., and Syracuse, N.Y. , are considering living wage proposals.
While the federal minimum wage stagnates at $5.15 an hour, these living wage laws give workers a real boost. The Bozeman, Mont., law, for example, calls for $8.50 an hour with health benefits, or $9.50 without them. Cincinnati’s scale is $8.70 an hour with benefits, or $10.20 without. And San Jose requires firms to pay workers $10.10 an hour with benefits or $11.35 an hour without them.
These laws came about because of grass-roots campaigns by churches, unions and community groups. And every time, business leaders warned that the living wage would cost jobs. They said it would hurt those who need the jobs the most, and it would create a hostile business climate.
But that has not happened.
In Los Angeles, back in 1996, for instance, the Chamber of Commerce warned of dire consequences, predicting a loss of 3,000 low-wage jobs. But the living wage law passed anyway the next year, and now the results are in.
A just-published report by the Los Angeles Alliance for a New Economy, a nonprofit policy research group, found that the law — which mandates $10.03 per hour and two paid annual vacation days — significantly increased pay for about 10,000 jobs, while firms lost an estimated total of all of 112 jobs.
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During the past century, whenever reformers have proposed policies to improve economic conditions — to raise wages, regulate business to be more socially responsible or increase corporate taxes — most business leaders argue that doing so will destroy the “business climate,” the incentive to invest. History reveals that they were crying wolf.
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– Peter Dreier is professor of politics and director of the Urban & Environmental Policy program at Occidental College.
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