The simmering local debate over living-wage legislation has temporarily receded following the defeat of a Montgomery County bill in August. But it promises to make a strong comeback, with activists in Montgomery County, Prince George's County, the District and Alexandria hoping to introduce legislation as early as next spring.
In the calm before the battle, supporters and opponents of living wage bills are taking stock and studying the experience in Montgomery County, as well as in the nearly 40 municipalities around the country that have passed similar bills.
One thing is for sure: The issue won't go away any time soon.
"This is just a new era" for workers in America, said Jen Kern, director of the national living wage resource center at the Association of Community Organizations for Reform Now (ACORN). "It's a very class warfarish debate," she said.
Business groups say increasing the costs of business will have adverse effects on workers: Businesses will flee jurisdictions that require them to pay a living wage, or unemployment will increase as businesses replace low-wage jobs with automated systems. Activists say businesses have a social responsibility to pay their workers a wage they can live on, and that increased purchasing power spurs local economies.
There is no national formula for calculating a living wage. It is primarily a political number hashed out in the local legislative process, based on calculations of the cost of living in the jurisdiction, including housing, food, transportation, health care and child care costs.
According to Wider Opportunities for Women, a Washington-based nonprofit research organization, the hourly wage necessary to support a family of four on two incomes is $9.78 an hour per wage earner in Prince George's County, $12.48 an hour in the District, $11.62 an hour in Montgomery County, and $11.40 an hour in Alexandria.
In Montgomery County, business opposition to a bill that originally would have affected 6,000 workers at firms contracting with or receiving money from the county led to a watered-down version that would have raised wages to $10.44 an hour for fewer than 1,000 workers.
Washington area jurisdictions may consider several different living-wage models: Some set wage floors for city and county contractors; others set the floor for businesses that receive tax abatements or other public financial incentives. Still others, such as the ordinance proposed in Santa Monica, Calif., apply broadly to businesses, whether they contract with the city or not.
It's also too early to gauge the full effect a living wage has on a local economy because the concept is relatively new. The first bill was passed in Baltimore City in 1994, raising the wages of 1,500 workers in stages to $7.70 by this year. Most of the current living wage ordinances passed in 1998, which means there aren't a lot of studies on their effect on businesses, said John Doyle, a spokesman for the Employment Policies Institute in Washington, a business-funded think tank that studies entry-level employment issues.
Doyle said he has heard anecdotes of businesses canceling contracts when living-wage ordinances pass. But Lisa Clauson, Massachusetts ACORN's lead organizer for Boston's living wage campaign, said the year-old ordinance that raised wages from $5.25 minimum wage to a $8.43 living wage hasn't increased unemployment or business defection from the city. "Contracts have not fallen off, and a lot of businesses right now were already paying at higher amounts anyway," because of low unemployment, she said.
Both sides' arguments are based mostly on predictions.
"It is a matter of elementary economics," said Doug Besharov, a scholar at the American Enterprise Institute, a conservative think tank in Washington. "Politicians don't like that because they think they can rewrite the laws of economics: If they raise the cost of labor, companies will simply replace their labor force with machinery." Also, taxpayers will have to pay for the higher price tag for government contracts caused by higher wages, he said.
Besharov said it comes as no surprise that studies published on the pro-living-wage side show that the cost of contracts in Baltimore increased a meager 1.2 percent after the ordinance passed. "If you have a token bill that only affects a few people," the economic impact will also be minimal, he said. If any substantial bill passes, the impact on economic development could be huge, he said.
Locally, Robert M. Zinsmeister is already feeling the potential effect. The assistant vice president for the Prince George's County Chamber of Commerce said several businesses considering relocating to the county have expressed concern over the living wage issue, and may not move to the county if such a bill passes.
"It would cast a cloud over Prince George's County, because [a living wage law] artificially inflates the cost of doing business with the county," without guaranteeing greater efficiency for businesses, Zinsmeister said. The chamber is willing to consider tax credit plans to benefit the working poor, he said.
In Montgomery County, County Executive Douglas M. Duncan (D), who opposed the living wage bill, has also countered with a tax credit package to help the county's working poor.
ACORN's Kern says that in all of the jurisdictions where a living wage bill has passed, "none of those tragic economic consequences have come to pass for businesses." Businesses typically threaten to leave areas where ordinances pass, but "I don't know of a single instance" in which firms have packed up and left, she said.
The debate is raising broader issues of fairness and social responsibility in the 50 or so communities around the country that are considering living wage proposals, Kern said. Not requiring companies that receive public funding to pay a living wage "touches on a larger debate of `Who is economic development for?' " she said. Creating poverty-level jobs "isn't family-friendly or community-friendly, so why do we want this?"
"The role of government for me is to improve the life of residents," said Prince George's County Council member Peter A. Shapiro (D-Brentwood), the most vocal proponent of a living wage and likely sponsor of a living wage bill early next year.
Shapiro says he hopes to avoid political wrangling in Prince George's by meeting with County Executive Wayne K. Curry (D) and other council members to consider many different ways to address the needs of working poor in the county. "As part of the process, there are so many things on the table, and while I think [a living wage bill] is critical, it is only part of the whole picture," he said.
MAKING ENDS MEET
In order to meet the self-sufficiency standard for one adult, one preschooler and one school-aged child, a family must be able to spend the following per month:
IN PR. GEORGE'S COUNTY* . . .
Child care: $900
Health care: $171
IN THE DISTRICT* . . .
Child care: $1,426
Health care: $167
* Tax credit subtractions not shown; hourly wage is calculated by dividng the monthly wage by 176 hours (8 hours per day; 22 days/month)
SOURCE: Wider Opportunities for Women