Waging War Over Pay

Ezra Mulugeta used to mark time according to the uniform he wore.

Most days started at 3:15 a.m., when he pulled a black jacket and captain’s hat from his closet and headed for work as a skycap at San Francisco International Airport. Afternoon meant speeding home, showering and pulling on a blue jacket and pants for his job unloading baggage from planes. His “days off” began when he put on yet another uniform for a third job as a security guard.

Between jobs, Mulugeta says, “I took naps.”

Now, Mulugeta has shelved one uniform and gained newfound time off. The reason: Airport officials mandated a so-called living wage for workers, boosting Mulugeta’s skycap pay from $4.75 an hour to $10, plus tips, and adding health insurance.

The raise allowed the divorced father of three college students to quit his security job while keeping his annual income at about $44,000.

San Francisco is one of more than 60 U.S. cities and counties that have passed living-wage laws in recent years, trying to ensure that low-wage workers can keep their heads above the poverty line. Most of those measures apply only to select groups of workers who have government contracts, but that might be about to change.

The battle lines in the living-wage campaign--which have already spotlighted the work of parking lot attendants and hotel workers in St. Louis and janitors at Harvard University--are shifting.

In cities such as Santa Monica, advocates are pushing measures to raise wages for thousands of workers in private companies. Opponents, who say living wages cost jobs or push out unskilled workers, are increasingly taking the fight to state capitals, asking legislators to keep cities from passing their own wage laws.

The movement, just like the concept, is decidedly amorphous. There is no fixed definition of what constitutes a living wage. And both advocates and opponents have difficulty distinguishing it from the better-known minimum wage, except that it equates to more money.

A living wage comes down to whatever local governments decide it should be--from $6.75 an hour in Milwaukee to $12.25 an hour in Santa Monica, effective next summer.

The federally mandated minimum wage is now $5.15 an hour. The government says a family of two adults and two children needs $17,500 a year to stay out of poverty.

The first national minimum-wage law dates back to the Great Depression. The living wage was born only in 1994, the brainchild of labor advocates and religious leaders in Baltimore. Concerned that some of the city’s working poor were relying on soup kitchens and homeless shelters, the group persuaded council members to pass a law raising pay.

Other cities followed, despite opposition from businesses, with most of the measures applying to people such as school bus monitors, janitors, day-care workers and home health aides, employed by private businesses that provide services under government contracts.

Critics call the laws feel-good measures that only drive up costs for businesses, leading them to cut jobs, or put the unskilled out of work. They cite research showing, for example, that raising wages for low-skilled adults working in restaurants attracts higher-skilled teenagers who simply displace the original employees.

“Who can be against the idea of helping people in need?” said John Doyle of the Employment Policies Institute, a Washington think tank strongly opposed to living wage laws. “But the method of helping people shouldn’t be to hurt the people you’re trying to help.”

Opponents also brand the measures as ploys by labor unions, who are among the biggest supporters, unable to compete with low-wage workers.

Proponents, led by the Assn. of Community Organization for Reform Now, or ACORN, counter with their own volumes of research. They acknowledge a very limited risk of job displacement but say that is far outweighed by the lift in living standards for workers.

“Even as our country is doing better and better and becoming more productive, low-wage workers are not seeing the benefits,” said Jen Kern, who directs ACORN’s living-wage campaigns.

So far, living wages have been enacted only on a very limited scale, making it hard to determine their effect. But the measures might soon play out on a broader stage, and already many more people are being drawn into the debate.

In Santa Monica, city council members this spring mandated higher pay for workers in hotels, restaurants and other businesses in a ritzy beachfront district popular with tourists. Business owners rail against the measure, saying it will double their labor costs.

The law is limited to establishments with $5 million or more in annual sales. So the owners of the P.F. Chang’s and Ocean Avenue Seafood eateries say they will cut back on business hours and workers to come in under the threshold. Sears intimated it might close its store in the district if forced to raise pay.

“It’s such a dramatic increase that businesses that are labor intensive, they just can’t possibly do it. They can’t survive,” said Tom Larmore, a lawyer and spokesman for Fighting Against Irresponsible Regulation, an alliance of businesses seeking to overturn the measure in a ballot referendum.

In Oregon, after five cities passed living-wage measures, the state’s restaurant association lobbied state legislators to stem the tide. The result was a law, signed in August, restricting cities from mandating wages at privately owned businesses unless the company receives a tax credit or direct government subsidy.

The way Chicago home health aide Diane Cunningham sees it, she and her co-workers are saving money by keeping ailing seniors out of nursing homes. Decent pay is a fair trade-off, she says.

“It made a big difference for me because I was able to get me a home,” said Cunningham, whose pay rose from $5.65 an hour to $7.60 when the city passed a living-wage law. “But it wasn’t easy, and it still isn’t easy.”