THE MINIMUM wage is an enduring legal monument to a time when Americans were really concerned about poverty. Jolted by the harsh realities of the Great Depression, people realized that the free market simply is not always a sufficient guardian of human well-being. Thus, the minimum wage was born. Everyone willing to work would be guaranteed a livable wage. This "wage floor" was intended to allow employees who worked full-time to afford food, shelter and basic necessities for themselves and their families. Unfortunately, this noble institution of a civilized economy has degraded considerably, even here in our own backyards. Many University and contracted employees are even today paid poverty wages, a fact for which we should all feel ashamed. The University owes it to its workers and this community to pay a living wage, and should take the initiative to do so.
The living wage idea is based much less on political ideology than it is on simple math. Assuming an average wage of eight dollars an hour (although contracted employees only average about $7.50), working full-time (40 hours a week) year-round, a person can only make a little over $16,500. That already puts him or her well below the poverty line for a single individual. In fact, communities where one can live on that little annual income are exceedingly rare. Charlottesville, whose ballooning housing costs and cost-of-living rates are unlikely to halt now that it's been rated the best place in America to live, certainly isn't one of them. And if that worker happens to have a child to support -- he, or more likely she, will have a very serious problem.
Living wage ordinances, like the kinds that have been passed in almost 100 cities and counties across the country (including New York, San Francisco, Cincinnati, Louisville, Santa Fe, Pittsburgh, Denver, Chicago, San Antonio, Los Angeles and even our own Charlottesville), usually mandate that businesses with city contracts pay their workers a wage that keeps them above the poverty line. That wage will vary according to the locale, because the cost of living in Charlottesville is obviously different than that in Lynchburg or in Boston. Regardless of the exact wage, the principle is identical: People who work full-time should earn enough to not go hungry or live in the street. The federal minimum wage, which has lost a third of its real value to inflation since 1968 and 10 percent since its last modest increase in 1997 (according to researchers at the Economic Policy Institute), clearly isn't accomplishing its goal of ensuring a basic level of well-being for American workers; and while we all wait for Congress to follow Sen. Ted Kennedy's courageous lead on this issue and raise it, it's up to localities to take care of their own.
The stock arguments against living wages have largely been debunked. Despite reasonable warnings by academic economists, instituting a living wage has not actually been shown to result in a dramatic rise in unemployment. In fact, in a multi-city study conducted by the Institute for Labor and Employment, the implementation of a living wage was never shown to result in either a rise in unemployment or a decrease in business investment. Most businesses -- between 75 and 82 percent -- reported less than a 1 percent increase in their total operating costs. Almost all businesses reported that they were much more likely to increase efficiency (which a living wage has been shown to do) and productivity than relocate or shut down. Even in New Orleans, where over a quarter of the work force receives within a dollar of the federal minimum wage ($5.15 an hour), research on a wage increase projected very little effect on employment. Perhaps this is why civic-minded senior economists from non-partisan organizations like the Fiscal Policy Institute, the Center for Economic and Policy Research, the Economic Policy Institute, the Center for Urban Economic Development and many others have endorsed a living wage as a way to strengthen communities and address the growing problem of working poverty.
But is it legal for the University to implement a living wage? Despite the administration's tone, it's likely that it is. Municipalities in Virginia like Alexandria and Charlottesville have already done so, even though they too are subject to the so-called "Dillon Rule" that encourages
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