Keep
Living Wage Alive
Atlanta's Attempt to Lift Workers Out of Poverty Would Have
More Benefits Than Drawbacks
The Atlanta Journal-Constitution - June 9, 2005
An
exhaustive study in Los Angeles provides after-the-fact support
for Atlanta's effort to institute a so-called living wage
for city workers and employees of municipal contractors. It
also suggests the failed attempt would not have been the bugaboo
that opponents in the Georgia Legislature feared.
"People
predicted doom and it doesn't happen," said David Runsten,
a co-author of the UCLA report released last week.
The
Atlanta City Council approved a living wage ordinance in 2003;
the next year the Legislature outlawed all such mandatory
standards.
Early
this year, the City Council tried again by passing a measure
that would have given preference to city contractors paying
wages of at least $10.50 an hour and providing health insurance.
Contractors willing to pay $12 an hour would not have had
to offer health insurance.
Led
by Rep. Earl Ehrhart (R-Powder Springs), state lawmakers made
that illegal, too.
"The
quickest way to 'kill' jobs is for the Atlanta City Council
to force a so-called 'living wage' on business," Ehrhart
was quoted as saying in 2003 by the American Legislative Council
Exchange, an organization of lawmakers. In 2005, he equated
the voluntary nature of the revised ordinance with the choice
faced by a robbery victim threatened with a baseball bat.
But
UCLA found that Los Angeles' living wage ordinance raised
incomes for low-paid workers, as intended, with minimal disruption
to employers and few job losses.
However,
based on the Los Angeles experience, Atlanta's living wage
ordinance likely would not have lifted every affected worker
out of poverty or provided health insurance to all of those
unable to afford it. The Atlanta City Council should keep
the limitations in mind if, in the future, it finds a way
to revive an idea that more than 100 other cities have embraced.
Los
Angeles faced objections before adopting its living wage ordinance
in 1997, but the results have been more benign than critics
forecast, according to the UCLA research. The four-year study
was specific to Los Angeles, but UCLA's Runsten believes the
findings are applicable elsewhere.
The
researchers found that:
Wages were increased for more than 7,700 workers through mandatory
raises. The minimum this year is $10.03 an hour, or $8.78
if the employer contributes $1.25 an hour toward health insurance.
Another 1,800 workers not covered by the ordinance nonetheless
received raises in a domino effect.
There were 112 jobs lost because businesses cut work forces
in response to the living wage ordinance.
Turnover fell. The reduced cost of replacing workers compensated
employers for about 16 percent of the higher mandated wages.
Employers recovered some of the remaining costs by cutting
fringe benefits, reducing overtime or passing on the extra
expense to the city of Los Angeles. The UCLA study did not
try to estimate the added cost to taxpayers; the city is attempting
to do that.
Despite the living wage, many of the affected Los Angeles
workers and their families remain impoverished.
Employers prefer to pay the higher hourly rate than contribute
to health care benefits.
Atlanta
lawmakers should study the issue carefully before attempting
to revive it. Likewise, Republican lawmakers who rode roughshod
over what should have been a local government decision can
take a lesson home, as well: Legislation written without the
benefit of sound research benefits no one.
Research
suggests the living wage can improve the well-being of low-paid
workers, but it will not cure all that ails them.
|