Though it fades in and out of the spotlight, the living wage campaign has been steadily moving along for years now. When it gains the attention of the powers that be, this national and local issue has been able to affect change. Now it is time to take another step.
Next Tuesday, Student Council will vote on a resolution that will determine its involvement in the issue. If it passes, Council will lend its resources and connections to the campaign, as well as make the official statement that this is an issue of importance to the community. This is a necessary step toward not only pressuring the University administration, but also helping to find a way to make the living wage a reality for the workers we see every day.
Two years ago, the University agreed to raise the pay of all direct employees to a living wage of $8.19 (the amount each parent would need to earn to support the minimum needs of a family of four). However, employees of companies contracted by the University, such as Aramark, are still not paid a living wage.
Paying a living wage to contracted workers is not something the University can simply decree. It is a difficult legal issue that has to be worked out with the BOV and state government in the grand tradition of bureaucracy. Because of Council's experience working with the University administration, its involvement in the issue will ensure constant forward movement.
Opponents of a living wage typically respond along the lines of, "Economic theory plainly shows that setting a wage above the market-clearing level results in unemployment. These bleeding-heart liberals would be hurting the very people they claim to help." This is the standard response, and its key fault is the appeal to economic theory.
The claim is that a company required to give its lowest paid employees higher wages would be unable to pay as many employees. But the last time the federal minimum wage was increased, in 1996 and 1997, the unemployment rate continued to plummet past what economists said was "full employment," the lowest unemployment that we can reasonably expect, according to economic theory. Numerous cities and states have passed ordinances prohibiting government agencies from contracting with companies that pay their employees less than a living wage, and the predicted ill effects have not come to pass.
The economic argument against living wage has been disproved by facts. If a company were to lay off employees at the bottom rung after being required to pay them more, that company would be guilty of no less than class warfare just to make a point. Even under the assumption that the company would have less money, all it has to do is lessen the pay disparity within the company.
That assumption, however, is itself false. Because economic theory is an art as well as a science, there are many answers to every question, and there is a reason why what economic theory "plainly shows" did not come to pass. Opponents of a living wage have forgotten one of the basic commandments of running an economy: Maximize all available resources.
The living wage raises productivity, the benefits of which should not be underestimated. Being able to support a family with one job, rather than two or three, raises morale and makes someone a better worker. It also increases retention rates, which decreases training and recruitment costs.
A study of Baltimore's 1994 living wage ordinance revealed that many of the contracting companies were happy with the results. The ordinance "levels the playing field" by allowing companies to bid on contracts without squeezing labor costs. (Mark Weisbrot and Michelle Sforza-Roderick, Baltimore's Living Wage Law: An Analysis of the Fiscal and Economic Costs of Baltimore City Ordinance 442). Furthermore, by helping people out of poverty, it has reduced the strain on social services.
These are not just abstract economic benefits. These are real benefits to real people. Economics makes it a premise that people are rational, self-interested consumer/laborers, and a living wage becomes imperative when we realize that every person is just a person. A living wage gives someone time to spend with their family, a consequence that is economically irrelevant only because economics is unable to calculate greater social benefits.
It is foolish to pretend that there are no gains to be reaped from increased wages. Raising pay to a living wage isn't just good for the workers; it's good for the companies and for society as a whole. Anyone who thinks that the free market economy should not be tampered with, lest the invisible hand come down and smite us all, needs to realize the historical fact that all levels of the government have been involved in the economy since time immemorial.
The resolution before Council should be passed in order to further the cause of a living wage everywhere. This resolution is a chance for Council to take an active and positive role in something that will have an effect outside of the student body and even outside the University. This is something that our country needs. In the richest nation in the world, anyone working full time should not have to live in poverty.
(Dave Algoso is a Cavalier Daily viewpoint writer.)
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