Living Wage
Background
Despite the wide spread agreement that the key to combating poverty is to move people "from welfare to work," many poor households have at least one working family member. These workers earn such low wages, however, that they can not support themselves and their families. A worker earning the current minimum wage - $5.15 per hour - earns $10,712 a year, $2,900 below the poverty line for a family of three.
Increasingly, the focus in raising wages has turned from federal minimum wage legislation to local "living wage" ordinances. Such laws require that contractors or subcontractors of city or county government service contracts pay their employees living wages. The reasoning behind these ordinances is that the government should set a community standard for wages, that tax dollars should not be keeping people in poverty, and that providing living wages ultimately reduces stress on the government by decreasing the number of people who will be dependent on social services. Many campaigns have defined the living wage as equivalent to the poverty line for a family of four (currently $7.91 an hour). But in localities that have passed these ordinances, living wages range from $6.25 to $10.75 per hour; some newer campaigns push for wages exceeding $10.75. Living wage coalitions have also expanded their proposals to include health benefits, vacation days, community hiring goals, public disclosure, community advisory boards, environmental standards, and language that supports union organizing.
Living wage ordinances have become law in almost 40 municipalities around the country. Other jurisdictions are currently wrestling with the issue, including a number of major cities. The issue is hotly contested wherever it is raised, and the success or failure of living wage bills is hard to predict. Variations on living wage laws have been passed in New York City, Milwaukee, Baltimore, San Jose, Minneapolis, St. Paul, Portland, Chicago, San Antonio, Los Angeles, New Haven, Des Moines, Cook County (IL), and several other cities and counties.
Living wage campaigns are typically local grassroots campaigns and are supported by a variety of community, religious, and labor groups and piloted by ACORN (the Association of Community Organizations for Reform Now). These campaigns engage in a broad range of grassroots activities, including circulating petitions, holding community meetings, gathering organizational endorsements, and meeting with councilmen and commissioners. Women's groups and groups representing minorities also have a vested interest in the matter since minimum wage earners are 60 percent female and disproportionately members of minority communities.
Critics of living wage ordinances offer the same arguments as those who challenge raising the federal minimum wage. They claim these laws actually harm those they are intended to help, because a raise in the minimum wage will eventually leading to increased unemployment. Business groups claim that as the price of labor increases, the demand for it will decrease. Some economists believe that wages will increase naturally due to market pressure. When the unemployment rate is low, businesses will compete for workers by raising wages.
These groups also warn of adverse consequences for businesses, especially small ones. Businesses that rely heavily on minimum wage labor may find themselves struggling to stay afloat if their operating costs are raised. They argue that local economies may slump as businesses leave areas where they are forced to pay employees a living wage.
Supporters of the living wage respond to these warnings with empirical analyses from the last federal wage increases in 1996 and 1997. Since the majority of living wage ordinances passed in 1998 (the concept is relatively new) it is too early to assess the full effect of a living wage on a local economy. On the whole, the analyses that do exist show no adverse effects on business.
In 1996, the Preamble Center for Public Policy, a research and education organization, analyzed the effects of a 1994 living wage ordinance in Baltimore. The study refutes the arguments of many living wage critics. The study found that:
1. The real cost of city contracts actually decreased since the ordinance went into effect.
2. Business investment in the city increased substantially in the year following the ordinance.
3. Companies interviewed that held contracts before and after passage of the ordinance did not report reducing staff levels in response to the higher wage requirement. Some contractors praised the ordinance for "leveling the playing field" by relieving pressure on employers to squeeze labor costs in order to win low-bid contracts.
4. The cost to taxpayers of compliance with the ordinance has been minimal, with the City allocating about 17 cents per person annually for this purpose.
Position of the Reform Jewish Movement
The Reform Movement has policy that speaks directly to workers achieving livable wages. In 1965, the Union of Reform Judaism passed a resolution entitled "The Eradication and Amelioration of Poverty" which urged the government to adopt measures "which would assure every man willing and able to work at a wage which makes possible a decent standard of living."
At its December 1999 Biennial, the Union of Reform Judaism also passed a resolution entitled "Adopted Resolution on Living Wage Campaigns," which calls on congregations to get more involved in local living wage campaigns. The Union for Reform Judaism resolved to:
1. Support living wage ordinances and bills to bring wages to at least the poverty line, preferably higher;
2. Encourage our congregations across North America to become involved in living wage campaigns in their local communities;
3. Urge members of the community, including supporters of a living wage, to commit themselves to advocate for and help raise necessary funds to enable non-profits to pay living wages without curtailing their services; and
4. Call upon our congregations, and all arms of the Reform Movement, examine their employment and contracting practices to ensure they reflect the spirit of this resolution.
In May 1999, the Central Conference of American Rabbis passed a resolution entitled "Living Wage Campaigns." It resolved to:
1. Support living wage ordinances and bills to bring wages to the poverty line;
2. Encourage rabbis across North America to become involved in living wage campaigns in their local communities; and
3. Encourage rabbis, their congregations, and all arms of the Reform Movement, to examine their employment practices to insure they reflect the policies set forth in this resolution.
Living Wage and Jewish Values
If there is a single common theme running throughout our Jewish tradition, it is that of social justice. Our scriptures teach us to support the widow, to extend our hands to the downtrodden. Our tradition demands that we "speak up, judge righteously, champion the poor and the needy (Proverbs 31:9)." According to Second Harvest, the nationwide network of food banks, emergency feeding programs have been called on 9% more in 2001 than in 1997. Forty percent of the households that received assistance from Second Harvest in 2001 included an adult who was working. As Jews, we have an obligation not only to feed the hungry but also to help those in need become self-sufficient (Maimonides, Mishneh Torah).
Our Torah also emphasizes the importance of a worker's wages. "You shall not abuse a needy and destitute laborer… but you must pay him his wages on the same day, for he is needy and urgently depends on it (Deuteronomy 24:14-15)." A similar statement appears in Leviticus, "You shall not defraud your neighbor, nor rob him; the wages of he who is hired shall not remain with you all night until the morning (Leviticus 19:13)." The Torah further expresses a commitment to economic justice in the remark, "If one hires a worker to work with straw and stubble and the worker says to him, "Give me my wages," if the employer says, "take the results of your labor as payment," we do not listen to him (Mishnah Bava Metziah 10:5)."
