Rising dough: Campaigns for a living wage

Over the past decade, a movement advocating a living wage for all Americans has been spreading through cities and universities. Within Los Angeles County, one of the country’s most expensive metropolises, cities are now grappling with an issue that pits business against employee, as each struggles to agree on the critical question — how much pay is enough?

How much money does it take to get by? In 1997, the federal government set that number at $5.15 — the current minimum wage. But there is a movement in Los Angeles, where the minimum wage is $6.75 as dictated by the state, and across the nation that’s working to redefine what is a fair wage.

The “living wage“ movement asks localities to set worker salaries above the federal minimum wage, in hopes of improving the quality of life and bringing more people into the middle class.

“People who work full time should not be on government aid, they shouldn’t be below poverty level,” said Derek Smith, a lead organizer for the Los Angeles Alliance for a New Economy (LAANE), the group behind the area’s many living wage campaigns.

The City of Los Angeles passed its own Living Wage ordinance, which only applies to city employees and businesses with city contracts, in 1997. Smaller cities within the county, such as West Hollywood and San Fernando, soon followed suit.

The City of Santa Monica is now working to pass such a “city-only“ law after activists, in 2003, failed to secure a living wage for all employees, both public and private, in the city’s upscale “coastal zone,” which borders on the heavily tourist-friendly Pacific Ocean. An aggressive campaign led by local business owners and hotels succeeded in defeating that ballot initiative.

Unions are almost always involved in these campaigns, providing the necessary torque to force higher wages. In Santa Monica, the union’s presence was felt very strongly as the Hotel Employees and Restaurant Employees Union, Local 11 (HERE) spearheaded an organizing drive at coastal hotels in conjunction with a living wage drive. Representatives of HERE believe that the threat of a government-mandated living wage prompted the local hotels to allow service workers to unionize, also agreeing to raise wages for non-management workers, including housekeepers, bell boys, and kitchen staff.

“The idea behind a living wage is that taxpayer dollars should not be exacerbating the problem of poverty,” said Jen Kern, director of the Living Wage Resource Center for ACORN (Association of Community Organizations for Reform Now), the organization at the forefront of the national living wage campaign.

Kern, and many living-wage activists, says that this is the reason for city living wages — that companies that benefit from government contracts should pay workers a “decent” salary.

The goal of both the living wage, and the minimum wage, is to help raise low-wage earners out of poverty. Studies on the impact of living wage measures have cut both ways. A 2002 Public Policy Institute of California (PPIC) study found that while these laws do help to reduce urban poverty, they also reduce overall employment.

“Living wage laws will lead to some job loss, but these laws do have beneficial effects,” said David Neumark, a senior fellow at the Public Policy Institute and the author of a study on living wage’s impact on low-income workers and families.

A 1999 Employment Policies Institute study predicted that if California adopted a statewide living wage law, more than 600,000 jobs and $8.3 billion in income would be lost. Proponents of the ordinances disagree with these findings.

“There is no evidence that people will get laid off because of living wage laws,” said Kern. “(The PPIC) study has been trashed by other economists.”

A national minimum wage was established in 1938 under the Fair Labor Standards Act, which promised a better life for workers. The law grew out of President Franklin D. Roosevelt’s Depression-era New Deal promise to raise wages and improve labor conditions in the country. When Roosevelt sent the bill to Congress in 1937 he urged that its passage would help to provide “all our able-bodied working men and women a fair day’s pay for a fair day’s work.”

Proponents of living wage laws, like the AFL-CIO, say the minimum wage hasn’t kept up with the rising cost of living, putting workers who earn such salaries far below the poverty line. The national living wage movement began in the 1990s in an attempt to rectify that discrepancy. Activists decided that taking on the federal government was too large and difficult a task given corporate resistance, so they focused instead on a smaller arena — the cities.

The first living wage campaign began in Baltimore in 1994 when a coalition of labor and religious leaders pushed for a local law requiring city contractors to pay their workers a more equitable wage, or as it has become known, a “living wage.” In time, movements spread to cities across the country — up to over 120 localities today. The campaigns are no longer isolated to cities, but have moved to college campuses, including Ivy League schools like Harvard and Princeton, since universities are frequent benefactors of government funding.

“Once you had one ordinance passed (in Baltimore) you had a model for how to do it,” said Kern.

The resulting grass roots effort relied on unions and local activists working together to persuade city officials and voters that it was unjust to not pay a “living wage“ to city and city-contracted employees, whose salaries were paid by the taxpayers. The dollar amount of a living wage, however, is a number no two cities seem to agree on.

The early living wage laws were not heavily enforced nationwide. Los Angeles’ own living wage law was rendered largely ineffective, in its early years, because of lax enforcement, but activists, such as LAANE, have worked to ensure enforcement through lobbying efforts and educating workers about their rights. Many laws, such as Los Angeles,’ also include whistle-blower clauses, protecting workers who report on non-complying employers.

Neumark said living wage proponents have made a “political“ decision to concentrate on the more narrowly focused city living wage laws dealing with public funds, rather than citywide laws that would encompass private businesses as well.

“It’s the first foot in the door,” he said. “The (city) proposals elicit fewer complaints from business.”

City-only living wage ordinances are founded on the belief that businesses that benefit from taxpayer dollars should in turn be required to give something back to the community. Unions and groups like ACORN and LAANE target city-connected businesses because that approach impacts fewer employers. LAANE’s prolonged fight against private business in Santa Monica is only one small example of the potential backlash. There are few citywide and statewide living wage initiatives because larger initiatives would force advocacy groups to go up against not just the local restauranteur, but corporate giants like Wal-Mart and McDonald’s.

While anecdotally individual workers say they have benefited from these wage increases, studies on the benefits of living wage laws, across the board, have been relatively inconclusive. The PPIC study found a clear trade off between higher wages and employment loss. The impact on poverty has been inconclusive as well.

“One of the goals (of living wage) is to put more money into the pockets of poor people,” said Kern. “We aren’t saying that this is the end all, be all to ending urban poverty. This is not a magic bullet.”

Opponents of living wage laws say they drive potential business away from the areas that have them. The role that unions play in these campaigns has also been a bone of contention for businesses. But both Neumark and Kern agree that the role is nothing more than “healthy“ self interest of the unions in helping their members achieve higher wages coupled with their general progressiveness towards social issues. Hotel employees in Santa Monica credit HERE with helping them achieve higher wages from their employers.

Many opponents of living wage laws suggest another alternative — instead of businesses increasing salaries, the federal government should increase the Earned Income Tax Credit (EITC), which targets low-wage workers and low-income families. The EITC gives low-income workers a tax credit for every dollar earned, up to a point. Since this credit is refundable, low-income workers will get money back from the federal government even if they paid no income tax. Michael Lind, a senior fellow at the New America Foundation, wrote in his article, “The Case for a Living Wage,” that a tax credit would be, politically, a more feasible alternative to helping low-wage workers since it wouldn’t impact businesses.

“While the EITC is the country’s single most important poverty program,” said Kern, “it is not a replacement for decent pay.”

Kern said the real problem with replacing living wage with a higher EITC is that it is a taxpayer funded program. “It’s just asking taxpayers to pick up the slack for McDonald’s and Starbucks who aren’t paying their workers enough.”

The push for living wage laws is continuing across the country. ACORN is working on several campaigns nationwide, having recently succeeded in passing citywide ordinances in San Francisco and Santa Fe, N.M. In the United States, more than 40 localities have enacted living wage laws and at least 75 more are considering them. Campaigns for statewide living wage laws are also underway in 19 states. LAANE is currently working to pass a city living wage in Santa Monica and is in partnership with HERE to organize more local hotel workers in an attempt to achieve, through union membership, what they were unable to achieve with the passage of the “coastal zone“ ordinance.

One step toward ending poverty, said Vivian Rothstein, the deputy director of LAANE, is “higher wages, people just need to earn a decent wage.”