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City
Officials Outline Benefits of 'Living Wage' Law
City News Service - June 3, 2005
By Erin Park
City
officials highlighted a study today showing that the
"living wage" law adopted in 1997 raised pay
for almost 10,000 workers without creating the job losses
that critics of the ordinance had anticipated. "This
study offers compelling evidence that living wage laws
can improve the quality of life for low-income workers,"
said co-author David Fairris, an economics professor
at UC Riverside. But the study also found that many
workers are still struggling to get by, and that the
law has failed to prompt employers to set up health
insurance plans for their workers, as backers of the
ordinance had hoped. The policy requires city contractors
to pay workers $10.03 an hour, or $8.78 plus a $1.25
contribution to health benefits. Workers are also given
12 paid and 10 unpaid days off a year. The law was designed
to eliminate the incentive for government to contract
out jobs to low-wage employers. Co-authored by researchers
with the Los Angeles Alliance for a New Economy, a group
that pushed for implementation of the law, the study
is the first to examine how the ordinance has impacted
workers and employers. The majority of pay increases
were at jobs at Los Angeles and Ontario international
airports, where the average mandatory pay jumped by
$1.50 an hour, or $2,600 a year, the study found. Thirty-one
percent of affected workers lack health benefits, and
44 percent rely on at least one government assistance
program, the study found. Still, researchers noted that
70 percent of workers affected by the law are low-income.
More than 125 cities and counties nationwide have enacted
"living wage" policies over the past 11 years.
"Workers are certainly enjoying better pay and
better benefits, and employers ... are enjoying and
benefiting from a reduced turnover and absenteeism by
their employees," City Council President Alex Padilla
said.
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