Liberals push campaign for 'living wage'

Human Events, Nov 26, 1999 by Heubeck, Eric

The broader labor movement and community and church groups are promoting the living wage campaign because they think it can be the prelude to comprehensive egalitarian "social justice" initiatives in the future. This would include "super-minimum" wage laws that would apply to all businesses in a city or state.

But the larger point they are trying to make in the course of arguing for living wage laws is that businesses will inevitably exploit their employees if not prevented by the government. If this perception becomes widely held, living wage advocates believe a whole range of other policy initiatives will have a greater chance of success.

Living wage supporters also see their campaign as an ideal way to build bridges between unions, community agitators, and church groups for future political battles. For instance, ACORN claims that a primary benefit of the living wage campaign is to "build and sustain permanent and powerful community, labor, and religious coalitions that promote greater understanding and support of each other's work and create the potential to influence other important public policy debates."

One immediate goal of the living wage campaign is to address the large number of workfare recipients who are required to work, in most cases for the minimum wage, in order to continue receiving welfare benefits. Unions protest that workfare recipients are undermining good-paying union jobs, and see living wage ordinances as a good way to make sure that welfare recipients cannot compete for their jobs at the current minimum wage.

Where does the burden of these laws fall?

That depends on the nature of the relationship of the employer to the city. If a company is a city contractor, the evidence suggests that most of the increased cost will simply be passed along to city taxpayers in the form of higher bids on contracts.

But if a business is merely located on government property and is leasing land from the city, then it will be at a disadvantage to businesses not located on government property. Those with small profit margins could be forced to close.

What makes the humanitarian arguments of living wage campaigners so ironic is that some of the people who will be most hurt by higher mandated wages are low-wage workers. Employers will be less likely to hire unskilled employees if they decide they cannot afford to pay them a higher wage. Fewer people will be hired, and those who are hired will not need the job most. Forced to Give

First Preference

Perhaps anticipating this, many living wage supporters try to ensure that city contractors are forced to give first preference to those affiliated with union hiring halls or "community" hiring halls run by ACORN. This feature has already been incorporated into living wage laws in Boston and New Haven.

One very curious feature of many living wage laws is that they force businesses that receive benefits from government, whether in the form of tax abatements or subsidies, to pay the higher mandated wage. Many of these businesses are located in economic development or "empowerment" zones designed to increase investment in the inner city.