Try living on a job that pays $7.50 an hour. It’s not a lot of fun.
But if we are aware of the difficulties of families trying to make it in low-wage jobs, we’re also aware of the challenges facing a small business trying to get started and confronting an array of taxes and fees, mandates and requirements, including the well-intentioned efforts to raise the minimum wage.
The cheering section for minimum-wage increases is not wrong when it focuses on the problem of trying to make it in low-wage jobs. The advocates sounded off at a hearing at New Orleans City Hall, but the same arguments also have been rehearsed in the State Capitol during almost annual debates on this issue.
Who can argue that the minimum wage is enough to raise a family?
“One in three renters in this city are paying more than 50 percent of their income on rent, which leaves very little else for education, transportation and food,” said Monika Gerhart-Hambrick, a policy analyst for the Greater New Orleans Fair Housing Action Center. “If we want the people who make the city great to keep living here, then we definitely need measures like this.”
“It’s been long overdue for a living wage,” said Robert “Tiger” Hammond, president of the Greater New Orleans AFL-CIO. He suggested that the measure coming before the City Council would include the hiring of a compliance officer to ensure that contractors obey the rules so that individual workers would not have to file costly lawsuits.
The New Orleans proposal is aimed at boosting the pay of low-wage employees of companies that have contracts with the city government or which obtain city grants or tax breaks.
The so-called “living wage” ordinance, sponsored by City Councilman Jared Brossett, would require companies that have contracts with the city worth at least $25,000 and those with projects that have received more than $100,000 in grants, tax abatements or subsidies from the city to pay a minimum of $10.10 an hour to the employees who work under those contracts or who work at sites that benefit from public money. Employers also would have to offer those employees at least seven days of paid sick leave a year.
Since introducing the ordinance, Brossett has proposed an amendment to lift the minimum wage to $10.55 an hour. “This ordinance is not going to be a golden ticket to the middle class,” he said. “But it is another step to expanding the middle class.”
A former legislator, Brossett was on the losing side of this debate at the State Capitol. And while his position is quite respectable, the advocates should also reflect on the impact of this proposal on the wider business community.
This piecemeal approach to wage mandates on business is a crowd-pleaser in the short term. There is alas another side of the story, including the data suggesting that the minimum wage is usually only an entry wage; while the impact might not be enormous on employment, there is considerable economic evidence — not to mention common sense — suggesting that new hires will be diminished by the higher cost.
The business owner who does not raise the wage of a reliable worker is failing his or her own interests.
At the state level, just as the city level, a patchwork of minimum wage regulations is needlessly confusing. We supported Gov. Bobby Jindal and many business groups in their view that Louisiana ought to abide by the national minimum wage.
We think that’s still a good idea, although that doesn’t preclude a national increase at some point.
Government leaning on particular contractors or grant recipients for an increased wage does not seem like a good policy.