By Laureen Lazarovici
By the early 1990s, Baltimore—an industrial powerhouse battered by the flight of manufacturing plants—was making a comeback. Subsidies to businesses had helped revive the inner harbor district, a bustling hub hosting a convention center, baseball stadium and trendy shops and restaurants. But union and religious leaders were frustrated that even in the face of this renaissance, some people were being left behind. The workers who cleaned the gleaming buildings and gardeners who kept the lawns trimmed still were showing up in soup kitchens and homeless shelters because they were earning the minimum wage, nowhere near enough to support a family.
That insight sparked the nation's first living-wage campaign. In 1994, after more than a year of coalition building, lobbying and negotiating, AFSCME and the community grassroots organization BUILD (Baltimoreans United in Leadership Development) convinced the city council to pass an ordinance requiring companies that have contracts with the city to pay workers $6.10 an hour (rising to $7.70 this year). Today, more than two dozen cities—including Los Angeles, Boston, and Detroit—have similar living-wage laws, potentially lifting thousands of workers out of poverty and spurring the creation of many powerful labor-community coalitions. The living-wage movement is taking fire, with campaigns under way in Austin, Texas; Alexandria, Va.; and many other cities.
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| | | | | | | | In action: Last fall, the union-community group Progressive Minnesota packed the St. Paul City Council chamber to demand the city enforce the living-wage policy the group helped pass in 1997. | | | | | |
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Across the country, activists are making the same argument: Corporations that benefit from taxpayer-funded contracts and subsidies have a responsibility to the communities where they do business to ensure workers have a decent standard of living.
"Our local governments should not be fostering poverty by contracting with employers who pay less than a living-wage," says Jim Cavanaugh, president of the South Central Federation of Labor in Madison, Wis., where both the city of Madison and surrounding Dane County have living-wage laws.
The living-wage movement sprang up in cities and counties where residents don't believe the minimum wage is sufficient and see the need to supplement efforts at the national level to raise the federal minimum wage (living-wage laws apply only to employees who work for municipal contractors or companies that receive taxpayer funded subsidies or support). In the face of fierce corporate opposition, Congress raised the minimum wage in 1996 to $5.15 an hour. Even so, that increase hasn't kept pace with inflation: The purchasing power of the minimum wage is 30 percent lower today than in 1968. If it accurately reflected rising prices, the minimum wage today would be $7.37, economist Robert Pollin writes in The living-wage: Building a Fair Economy. A minimum-wage worker who puts in 40 hours a week year-round earns $10,300—much less than the official poverty level of just over $16,000 for a family of four.
Dee Reynolds, who spearheaded a union organizing drive at the Milwaukee nursing home where he worked, says there is a big difference between working for low wages—unable to afford health insurance for himself and his young daughter—and getting decent pay. "Now I really believe in it," says Reynolds, who became an SEIU Local 150 organizer and now chairs the living-wage Task Force of the grassroots economic development group Campaign for a Sustainable Milwaukee.
Union leaders know that building coalitions with community and religious groups is key for living-wage efforts to succeed. In Chicago, union leaders and ACORN successfully linked a living-wage vote to a move to raise city council members' pay. Rather than risk political embarrassment, the city council unanimously passed the ordinance after derailing it a year earlier.
living-wage campaigns are part of an overall strategy that leads to organizing gains for new workers. In several cities—Los Angeles and San Jose, Calif., for example—living-wage ordinances contain provisions that may help level the playing field between unions and companies, potentially enhancing union organizing among workers.
Five years after Baltimore's living-wage law went into effect, the nightmare scenarios corporations predicted—that businesses would flee the city, taxes would rise, no one would want to compete for contracts—proved false. A new study by the Economic Policy Institute shows costs to city contractors actually went down. Why? Because higher wages result in improved morale and lower turnover, leaving employers with fewer retraining costs. Treating workers fairly and paying them a living-wage turns out to be good business after all.
