New study shows higher incomes from 'living wage' outweigh the cost in job losses.
Three years ago, Juana Zatarin couldn't make ends meet. The mother of three, a baggage handler at Los Angeles International Airport, was subsisting on an income about half that of the federal poverty rate of $17,028 for a family of four.
Today, thanks to a "living wage" law requiring city contractors to pay employees a minimum of $8.97 per hour, Ms. Zatarin earns more than $24,000 a year. Now life is good. "I can make my payments on time now and even have a chance to take some time off," she says.
It is a story that is being repeated in dozens of cities across America as part of a trend that surprisingly has continued to spread even during the economic downturn.
When Baltimore in 1994 became the first American city to adopt a so-called living-wage ordinance, critics said it would reduce employment and hobble local businesses and contractors forced to pay higher wages.
But more than 60 municipalities have since passed such laws, including the broadest, yet in New Orleans in February, and another last week in Santa Fe. The laws mandate that businesses under contract with the city or in some cases businesses that receive grants, subsidies, or tax breaks from the city pay employees a wage large enough to lift their families out of poverty. (In California, wages under such agreements range from a low of $7.25 in Pasadena to a high of $11 in Santa Cruz.)
Despite some defeats, several dozen campaigns are percolating from coast to coast, even during the current economic slowdown, causing even detractors to admit the movement seems here to stay.
"Over all the early objections and fears, we are seeing a broadening of these laws to larger cities and to all sections of the country," says Robert Pollin, a University of Massachusetts economist who wrote a book called, "Living Wages," and has conducted surveys of cities that have adopted such laws. "Based on earlier successes, the movement is gaining confidence and momentum, strengthening the discussion and carrying it to bigger and bigger arenas."