Virginians Deserve a Living Wage

Commonwealth Should Follow Maryland's Lead

Virginia and Maryland share a border and the culture of the Washington suburbs, yet the political ideologies of the two states stand on opposite sides of a great gulf. Nowhere is this more apparent than in the laws relating to employment.

In 2006, Maryland passed the Fair Share Health Care Fund Act, dubbed the Wal-Mart law because the only employer affected in the state was Wal-Mart. The statute attempted to force large employers either to provide health insurance for their low-paid employees or compensate the state for the cost of providing them with public health insurance. Although the courts struck down the law last year, Maryland legislators again struck a blow for employees this spring by enacting a statewide living-wage law.

The statute requires businesses that contract with the state to pay their employees based on the cost of living in the various geographic areas of the state, well above Maryland's minimum wage of $6.15 per hour. Maryland also allows government employees to unionize, and it permits unions and employers to negotiate contracts that require employees to pay the cost of union representation.

Across the river, Virginia outlaws public employee bargaining and bars union security agreements in the private sector. Virginia's General Assembly recently rejected an increase in the state minimum wage from $5.15 per hour to $6.50 per hour. Furthermore, Attorney General Robert F. McDonnell has taken the position that localities themselves cannot enact living-wage ordinances.

The decision is based on McDonnell's interpretation of the Dillon Rule as applied to local contracting authority. The 139-year-old Dillon Rule, which most states have abandoned, severely restricts local authority. As Virginia has grown and diversified over recent decades, the need to respond to widely varying local conditions has increased. The archaic Dillon Rule hampers local governments in crafting responses that best meet the needs of their residents.

Even accepting the Dillon Rule, however, the attorney general has erred in interpreting the law to prohibit both local governments and state universities from enacting living-wage provisions. State procurement laws give local governments wide authority in establishing the competitive bidding process for government contracts and specifically allow consideration of quality as well as cost.

The axiom that you get what you pay for has survived because of its truth. Research shows that higher pay is associated with better employee morale, lower turnover and lower absenteeism. Employers who pay higher wages conduct more employee training and have a lower employee injury rate. All these in turn are associated with more productive and efficient employees. Thus, it is absolutely reasonable for a local government or university to conclude that requiring contractors to pay a living wage would result in higher-quality goods and services.

The Washington suburbs are particularly handicapped by the attorney general's opinion. Northern Virginia employers will now have to compete for workers with Maryland contractors paying the living wage. Maryland contractors in the Baltimore-Washington corridor must pay workers at least $11.30 per hour, while Virginia employers are free to pay as little as $5.15. The high cost of living in Washington area surely will draw the best workers to jobs with Maryland contractors, diminishing the quality of government services for Northern Virginians.

If the Dillon Rule is not abandoned, McDonnell should review his opinion and release local governments from the shackles that prevent them from providing the best services to their residents. The living wage would not only improve government services but also raise the standard of living of many Virginia workers, making them less dependent on government benefits and better able to contribute to the consumer economy. In a state as wealthy as Virginia is, no worker should live in poverty. More balance between the interests of employees and employers in the laws relating to employment would benefit all Virginians.

-- Ann C. Hodges

Richmond

The writer is a law professor at the University of Richmond. Her e-mail address isahodges@richmond.edu.