Living Wage by AC, JF, TS: Difference between revisions

Latest revision as of 13:57, 5 September 2007

What Is The Living Wage?

The living wage is the minimum hourly wage necessary for a person to achieve some specific standard of living. The living wage comes from the basic premise that anyone in this country who works for a living should not have to raise a family in poverty. Unions, community groups and religious groups are all main advocates of the new living wage movement.

"The living wage movement is committed to reversing the economy-wide wage squeeze, stopping tax giveaways to big business, reenergizing the labor movement, and ending the war on the poor." (Pollin)

Statistics

In 1997, there were 3.7 million families living in poverty.
- 65% of these families had 1 or more members who maintained a job.
  - 22% of the families living in poverty in the United States have at least 1 member with a full time job.
In 1997, with the minimum wage at $5.15/hour (which it still is today) the real buying power of the wage a full-time worker would earn in a year was $10,300.
- This wage is below the poverty threshold considered to be $11,235/year for a family of 2: Thus, a person working full-time at minimum wage is earning an annual amount that technically puts them below the poverty line.

Costs

An estimated $40-$60 million a year would be spent by firms on costs of raised wages.
About 1/2 the cost to raise minimum wage is made up by decreased turnover and increased productivity.
- There are 3 types of firms that all experience different costs from living wage ordinances...

"Low-impact" firms

Majority of firms fall into this category. These firms experience only around a 1% rise in production costs, which is so miniscule it can be easily absorbed.

2.Middle-impact firms

Relatively small number of these firms. These types of firms hold concession contracts with the city (ex: restaurant outlet in an airport). These will experience production cost increases around 10% of their total costs, which can be absorbed through modest price increases.

3."High-impact" firms

These types of firms perform city services (ex: child care service providers) and will experience significant cost increases. However these firms should be able to pass on a great deal of these costs to the city through better contract terms.

(Even when they do pass on costs to the city, the costs will represent such a minute share of cities' budgets that they too will be easily absorbed).

ALSO: These high impact firms should experience productivity gains, morale increases, as well as a decrease in turnover and absenteeism, which will offset some of the cost increases.

The following graph shows the costs of firms due to the living wage ordinances.

Who Benefits, And How Do They Benefit?

1.Workers and their families

Their living standards rise when the ordinances become law. Gain access to better health care. Paid days off can be enjoyed as a family. Rely less on government subsidies such as welfare and food stamps.

2.Firms

Workers are being paid more, thus morale increases and turnover and absenteeism decrease, leading to an overall increase in productivity. In addition, firms also experience a better quality of work from their employees, better cooperation with management, and more flexibility in the operation of business.

An example of this comes from the policies of the Ford Motor Company. In 1913, the turnover rate was around 400% which meant that the company was hiring four times the average number of workers he actually needed. Absenteeism was similarly high. Ford instituted a $5.00 a day wage rate for production workers, which resulted in the wages almost doubling. After this move, there were significant decreases in absenteeism and turnover.

3.Communities

Brings increased spending power to the community through increased disposable income. Leads to a higher rate of home ownership, education, and opportunities for business investments for local residents.

The following graph shows how and in what areas governments end up saving due to living wage ordinances.

Indirect Ways People Benefit

1.Families have greater access to loans and other sources of credit (used to buy homes and cars) or finance higher education leading to better jobs.

2.Workers will earn a high enough wage that they will not have to wait in line for food stamps or depend on other government aid. This will increase their sense of dignity, and increase their pride in their jobs, making them feel that their work is worthwhile.

Opposition & Rebuttles

1.Opposition says living wage ordinances should be made national, rather than city by city.

Rebuttle: Living wage ordinances must be case-specific because different cities have different costs of living.

(Ex: Costs of living in San Francisco is much more than the cost of living in a rural city such as Harrisburg).

2.Opposition says food stamps, welfare, and charity would be better to use than a living wage ordinance because it targets exactly who it wants.

Rebuttle: The living wage should cover your living expenses without the need for additional government aid.

3.Opposition says it will cause the unemployment rate to rise because firms will have to hire less workers because of the increased wage.

Rebuttle: The unemployment rate may rise, but it won't be a direct result of the living wage ordinance. If the rate goes up it will be due to the fact that once, discouraged workers, are now re-entering the work force because the wages firms are paying, are now higher.

"The Baltimore Case"

In 1994, the first succesful living wage movement passed in Baltimore, MD. The ordinance ordered firms holding contracts with the city to pay a minimum of $6.10/hr in 1996. This wage grew to $7.70/hr in 1999, and required the living wage rise in proportion with the inflation rate.

Within 3 years, living wage laws were passed in 12 other cities.

By the year 2000, 42 cities had implemented and adopted ordinances.

Other Cities That Have Implemented Living Wage Ordinances Or Similar Measures

Boston, MA
Buffalo, NY
Cambridge, MA
Chicago, IL
Desmoines, IA
Detroit, MI
Duluth, MN
Durham, NC
Hartford, CT
Jersey City, NJ
Los Angeles County, CA
Miami-Dade County, FL
New York, NY
West Hollywood, CA
Portland, OR
San Antonio, TX
Touscon, AZ
More...

Three Living Wage Ordinance Plans

The following are three plans that were implemented in the indicated cities.

Real Value of Minimum Wage

Shown in the graphs below, the real buying power of the minimum wage has been steadily decreasing over the years. As price levels, and inflation rates rise, the wage level has not proportionally been rising with it. Even after the minimum wage was increased to $5.15/hr in 1997, the wage still provided a full-time worker with 19% less than the income needed for a family of three at the poverty threshold.

Actual Wage Values

Video Debate on the Living Wage

Sources

Pollin, Robert, and Stephanie Luce. The living Wage: Building a Fair Economy. New York: The New Press, 1998.
"Federal Minimum Wage Rates, 1955-2006." Infoplease. 3 Dec 2006 <http://www.infoplease.com/ipa/A0774473.html>.
"Working Hard or Hardly Working? Living Wage Ordinances." Hoover Institution. 01/26/2000. 3 Dec 2006 <http://www.hoover.org/publications/uk/3391081.html>.

@@ Line 1: / Line 1: @@
 == What Is The Living Wage? ==
+The living wage is the minimum hourly wage necessary for a person to achieve some specific standard of living. The living wage comes from the basic premise that anyone in this country who works for a living should not have to raise a family in poverty. Unions, community groups and religious groups are all main advocates of the new living wage movement.
-The living wage is the minimum hourly wage necessary for a person to achieve some specific standard of living. The living wage comes from the basic premise that anyone in this country who works for a living should not have to raise a family in poverty. Unions, community groups and religious groups are all huge advocators of the new living wage movement.
+"The living wage movement is committed to reversing the economy-wide wage squeeze, stopping tax giveaways to big business, reenergizing the labor movement, and ending the war on the poor." (Pollin)
 == Statistics ==
+[[Image:STATS.gif|thumb|Description]]
 *In 1997, there were 3.7 million families living in poverty.
 **65% of these families had 1 or more members who maintained a job.
@@ Line 13: / Line 14: @@
 === Costs ===
+[[Image:A_dollar.jpg|thumb|Description]]
+*An estimated $40-$60 million a year would be spent by firms on costs of raised wages.
+*About 1/2 the cost to raise minimum wage is made up by decreased turnover and increased productivity.
+**There are 3 types of firms that all experience different costs from living wage ordinances...
+:#"Low-impact" firms
+:::*Majority of firms fall into this category. These firms experience only around a 1% rise in production costs, which is so miniscule it can be easily absorbed.
+::2.Middle-impact firms
+:::*Relatively small number of these firms. These types of firms hold concession contracts with the city (ex: restaurant outlet in an airport). These will experience production cost increases around 10% of their total costs, which can be absorbed through modest price increases.
+::3."High-impact" firms
+:::*These types of firms perform city services (ex: child care service providers) and will experience significant cost increases. However these firms should be able to pass on a great deal of these costs to the city through better contract terms.
+:::::(Even when they do pass on costs to the city, the costs will represent such a minute share of cities' budgets that they too will be easily absorbed).
+::::::ALSO: These high impact firms should experience productivity gains, morale increases, as well as a decrease in turnover and absenteeism, which will offset some of the cost increases.
+*The following graph shows the costs of firms due to the living wage ordinances.
+[[Image:Firm_effects.JPG|thumb|Description]]
+== Who Benefits, And How Do They Benefit? ==
+[[Image:Worker.jpg|thumb|Description]]
+:1.Workers and their families
+:*Their living standards rise when the ordinances become law. Gain access to better health care. Paid days off can be enjoyed as a family. Rely less on government subsidies such as welfare and food stamps.
+:2.Firms
+:*Workers are being paid more, thus morale increases and turnover and absenteeism decrease, leading to an overall increase in productivity. In addition, firms also experience a better quality of work from their employees, better cooperation with management, and more flexibility in the operation of business.
+::*An example of this comes from the policies of the Ford Motor Company. In 1913, the turnover rate was around 400% which meant that the company was hiring four times the average number of workers he actually needed. Absenteeism was similarly high. Ford instituted a $5.00 a day wage rate for production workers, which resulted in the wages almost doubling. After this move, there were significant decreases in absenteeism and turnover.
+:3.Communities
+:*Brings increased spending power to the community through increased disposable income. Leads to a higher rate of home ownership, education, and opportunities for business investments for local residents.
+:The following graph shows how and in what areas governments end up saving due to living wage ordinances.
+[[Image:Government_Savings.JPG|thumb|Description]]
+===== Indirect Ways People Benefit =====
+:1.Families have greater access to loans and other sources of credit (used to buy homes and cars) or finance higher education leading to better jobs.
+:2.Workers will earn a high enough wage that they will not have to wait in line for food stamps or depend on other government aid. This will increase their sense of dignity, and increase their pride in their jobs, making them feel that their work is worthwhile.
+== Opposition & Rebuttles ==
+.Opposition says living wage ordinances should be made national, rather than city by city.
+:*Rebuttle: Living wage ordinances must be case-specific because different cities have different costs of living.
+::*(Ex: Costs of living in San Francisco is much more than the cost of living in a rural city such as Harrisburg).
+.Opposition says food stamps, welfare, and charity would be better to use than a living wage ordinance because it targets exactly who it wants.
+:*Rebuttle: The living wage should cover your living expenses without the need for additional government aid.
+.Opposition says it will cause the unemployment rate to rise because firms will have to hire less workers because of the increased wage.
+:*Rebuttle: The unemployment rate may rise, but it won't be a direct result of the living wage ordinance. If the rate goes up it will be due to the fact that once, discouraged workers, are now re-entering the work force because the wages firms are paying, are now higher.
+== "The Baltimore Case" ==
+In 1994, the first succesful living wage movement passed in Baltimore, MD. The ordinance ordered firms holding contracts with the city to pay a minimum of $6.10/hr in 1996. This wage grew to $7.70/hr in 1999, and required the living wage rise in proportion with the inflation rate.
+Within 3 years, living wage laws were passed in 12 other cities.
+By the year 2000, 42 cities had implemented and adopted ordinances.
+===== Other Cities That Have Implemented Living Wage Ordinances Or Similar Measures =====
+*Boston, MA
+*Buffalo, NY
+*Cambridge, MA
+*Chicago, IL
+*Desmoines, IA
+*Detroit, MI
+*Duluth, MN
+*Durham, NC
+*Hartford, CT
+*Jersey City, NJ
+*Los Angeles County, CA
+*Miami-Dade County, FL
+*New York, NY
+*West Hollywood, CA
+*Portland, OR
+*San Antonio, TX
+*Touscon, AZ
+*More...
+=== Three Living Wage Ordinance Plans ===
+The following are three plans that were implemented in the indicated cities.
+[[Image:Im_a_jpeg.JPG|thumb|Description]]
+== Real Value of Minimum Wage ==
+Shown in the graphs below, the real buying power of the minimum wage has been steadily decreasing over the years. As price levels, and inflation rates rise, the wage level has not proportionally been rising with it. Even after the minimum wage was increased to $5.15/hr in 1997, the wage still provided a full-time worker with 19% less than the income needed for a family of three at the poverty threshold.
+[[Image:Povertyyy.gif|thumb|Description]]
+[http://www.infoplease.com/ipa/A0774473.html Actual Wage Values]
+[http://www.hoover.org/publications/uk/3391081.html Video Debate on the Living Wage]
+== Sources ==
+*Pollin, Robert, and Stephanie Luce. The living Wage: Building a Fair Economy. New York: The New Press, 1998.
+*"Federal Minimum Wage Rates, 1955-2006." Infoplease. 3 Dec 2006 <http://www.infoplease.com/ipa/A0774473.html>.
+*"Working Hard or Hardly Working? Living Wage Ordinances." Hoover Institution. 01/26/2000. 3 Dec 2006 <http://www.hoover.org/publications/uk/3391081.html>.