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.

 

 

LosAngelesLivingWageStudy.org