The City Council's economic-development committee met last week to discuss requiring companies that do business with the city to pay a "living wage." The discussion is part of the proposed living- wage ordinance that includes full-time city workers, temporary city workers, and employees who work for companies that get substantial amounts of money from the city in contracts or in subsidies such as the payment-in-lieu-of-taxes (PILOT) program.
In the past decade, roughly 100 cities have adopted living-wage laws requiring employees to be paid enough to support themselves and their families at a subsistence level. Locally, the Living Wage Coalition began campaigning for the ordinance three years ago, and in February, the full council voted to pay full-time employees at least a salary that equates to about $10 an hour. The complete proposal -- including recommendations for temporary workers and employees for outside companies -- is scheduled to come before the council in October.
"It does not apply to vendors. It's not for companies we buy office supplies from," says Rebekah Jordan, executive director of the Mid-South Interfaith Network for Economic Justice, one of the member organizations of the coalition. "It's only for people doing actual work for the city."
Under the Living Wage Coalition's proposal, temporary workers who are employed throughout the year would be included, but those employed seasonally, through such initiatives as the summer youth job program, would not.
In discussing contractors, councilmember Carol Chumney said she favored Atlanta's system, which gives preference for contracts to companies that pay a living wage but doesn't require it.
The Living Wage Coalition sees a flaw with that. "Our position is: If you say to contractors, 'We hope you pay a living wage and we'll give you preference if you do,' if none of the companies [pay a living wage], you'll have to contract a low-wage employer," says Jordan.
Council members asked for information on the cost impact to the city's budget. The human-resources department is currently working on the analysis, but internally, director Lorene Essex says the policy won't just affect low-wage workers.
"There's a ripple effect," she says. "When we move that bottom tier of people up to $10.21 an hour, it probably moved them in line with someone in a higher grade. In order for you not to overlap [salaries], you have to move everybody up at the same rate and distance."
But what a living-wage ordinance would mean to contractors is still up for debate. Council members asked members of the administration to find out how much contractors currently pay employees and how the change would affect employers.
"I'd hate for companies to say, 'Okay, if we've got to do this, I'll let three people go.' It may mean a living wage for a few people while other people are looking for a job. ... That's the risk we run," says council chair TaJuan Stout Mitchell.
Judging by a report from New York's Brennan Center for Justice, the cost to the city would be modest. In 12 cities the study looked at, the contract cost increase was less than 0.1 percent of that city's overall budget.
"The studies have found that contractors absorbed some of the cost," says Jordan. "We've assumed all the cost increase is passed onto us."
The impact is also lessened because many of the city contracts are for professional services.
"In addition to doing the right thing, the city is going to see an improved ability in the quality of the work they get," says Jordan. "When you pay a living wage, workers want to keep their job: They work harder, they [stay] longer at one job, they learn to do it better. The companies are not continually recruiting new people."
I'm always trying to advocate for spending our tax dollars wisely. And that doesn't always mean going the cheapest route. In this case, if we award a company a city contract based on the fact they submitted the lowest bid -- but they're not paying their employees enough to live above the poverty line -- we're in effect subsidizing that company. I'm talking food stamps, subsidized housing, and medical care for their employees.
We may be getting a better deal on the contract, but overall, it's not a great deal for the city.
Companies under the much-discussed PILOT program could create a similar situation. If they're not paying a living wage, and we're already giving them a tax break to locate here, who exactly is benefiting?
A living wage won't just help individual families. It can mean a stronger overall tax base, parents who don't have to work two jobs and can be more involved in their kids' education, and a stronger economic forecast for the future.
And that's good enough for government.