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L.A. debates 'living wage'
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September 23, 1996: 1:33 p.m. ET
City contractors might have to pay workers twice the federal minimum
From Correspondent Casey Wian
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LOS ANGELES (CNNfn) -- Not everyone believes that President Clinton's federal minimum wage hike to $5.15 per hour is enough. In fact, some cities are even discussing proposals which would pay workers nearly double the federal standard.
The concept? A "living wage."
Lancaster Uniform Cap, which manufactures embroidered caps for the Los Angeles Police Department, is one of dozens of companies in L.A. which could face higher expenses under the city's proposed living wage ordinance. A law being considered would force city contractors to pay workers at least $7.50 an hour plus benefits --or $9.50 an hour without benefits.
Ernest Aguilar, Lancaster Uniform's CEO, said the increased costs would be passed along to consumers.
"When you look at that you need to pay a certain amount of money because you're being dictated by the government to do that, then of course I would have to increase the prices of my product," he said. "I would consider moving out of Los Angeles for that reason."
Councilwoman Jackie Goldberg is sponsoring the living wage ordinance.
"The question is, do you get the kind of service that you need if a person isn't making enough to live on? The jobs have to be done," she maintained, "and we want whoever does them to be able to live on the $15,000 salary they would earn with this new wage."(199K WAV) (199K AIF)
The Deputy Mayor of Los Angeles, Gary Mendoza, also indicated that "we don't disagree with the goals of the living wage way to improve the position of the low-wage worker."
The city's minimum wage would far exceed that of other cities that are considering or have adopted higher minimum wages for contractors, including New York, Baltimore, Milwaukee, and Chicago.
Not everyone is excited about the prospect of such a substantial increase. Elaine Reardon, an economist with the Milken Institute, expressed serious concern over the possibility that the higher wages might lure a different work force.
"I don't think the policy will have the impact they expect, because as you increase the wage, you'll attract higher quality workers. So, you might get college kids who are now willing to do these kinds of jobs, and the people you'll hurt are exactly the less skilled, welfare-ish population," Reardon said. (160K WAV) (160K AIF)
Critics say the living wage is an attempt to protect the jobs of union workers from efforts to privatize many city services.
Living wage supporters say they're waiting for the results of an economic impact study, then plan to put the measure to a vote in October.
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