Publications: State Government Relations
The Living Wage

Hailed by unions for providing "a fair day’s pay for a day’s work" and panned by privatization advocates as "clearly a transparent device to drive up the cost of community services and make privatization much less attractive,"¹ Living Wage campaigns are picking up steam. The "Living Wage" has varied definitions, but generally is designed to provide an annual income to match the federal poverty level for a family of four. That equals about $7.70 an hour.

On December 13, 1994, Baltimore Mayor Kurt Schmoke (D) signed the country’s first Living Wage law. Since then, the effort to enact Living Wage ordinances, coordinated nationally by the Association of Community Organizations for Reform Now (ACORN), has gained momentum across the country. Portland (Oregon), Milwaukee, Minneapolis, St. Paul, Jersey City, Boston and Los Angeles have all adopted Living Wage ordinances. The following cities have considered similar measures: Philadelphia and Reading, Pennsylvania; Oakland, Pasadena and West Hollywood, California; and Duluth, Minnesota. State legislation has been considered in Georgia, Maryland, Ohio, South Carolina and Wisconsin.

Jersey City and St. Paul require additional compensation if the employer does not provide health benefits. Most of the ordinances apply this wage requirement to private companies working on government contracts. Boston’s law, the most far-reaching to date, also covers companies receiving grants or subsidies from the government.

With ordinances just beginning to take effect, there are few reports of the laws’ effects on the labor force at large. In Baltimore, the ordinance is being phased in, and the wage requirement increased from $6.60 an hour to $7.10 an hour on July 1, 1997. Larry Ennels, of Baltimore’s Minimum Wage Commission, reports that employees of the city’s contractors have begun to turn down work on private contracts for which they would earn $5.25 to $5.50 an hour, in favor of holding out for work on a government contract.

And, interest in the living wage will not be subsiding any time soon. Jen Kern of ACORN reports that their organization receives two calls every week from additional cities looking to initiate living wage campaigns. "It [the national living wage campaign] is definitely catching on," Kern said, "As community organizations try to find new ways to address their cities’ problems and as long as current economic development programs are not achieving their goals, I expect more cities will pass Living Wage ordinances."

¹ E.S. Savas, Professor, City University of New York, "Contract Revisions," Ed Carson, Reason Online, July 1996.

- Charles E. Scott, Manager of State Issues, 1998