Anyone working for a company that gets significant contracts or subsidies from city government in New Orleans will have to be paid at least $10.55 an hour starting next year.
City Council members unanimously approved a “living wage” ordinance for those workers on Thursday, couching the measure as a blow against inequality and a moral duty for the city to pay its residents a decent salary and to put employees performing public functions through private companies on a more equal footing with their government counterparts.
“I will not condone city funds going to pay poverty wages,” said Councilman Jared Brossett, the measure’s lead sponsor.
While the measure was cheered as a significant step forward by workers’ advocacy organizations — particularly in light of a state law barring the city from setting a minimum wage for all workers — many also argued that in a city with a rising cost of living and deeply entrenched poverty, the floor set by the council was still not high enough to provide for basic needs.
“Don’t let this be the final iteration of this particular document,” Norris Henderson said.
The council approved the measure by a 6-0 vote, with Councilwoman Stacy Head absent.
The ordinance requires companies with city contracts worth $25,000 or more to pay their workers at least $10.55 an hour and provide them with at least one week of paid leave each year.
Companies that receive subsidies from the city — such as tax breaks, direct assistance or reduced rents — worth $100,000 or more in a 12-month period would face the same requirements and would also have to continue to pay that rate for 10 years from the date of the agreement or from their final payment by the city, whichever was later.
The major exception would be people enrolled in job training programs targeted at youths that are sponsored by the city.
State law prohibits the city from setting its own minimum wage for all workers. Louisiana as a whole defaults to the federal minimum wage of $7.25 an hour. But the city can set its own rules for contracting.
“We’re no longer going to wait for the state of Louisiana to take care of the people of New Orleans,” Councilwoman LaToya Cantrell said.
“I wish we could do more, but as a city we have the power to put our money where our mouth is,” Brossett said.
The increase had the backing of a variety of groups, most visibly Stand With Dignity, which advocates for better opportunities for minority workers on city projects and higher wages generally and whose members rallied outside City Hall chanting “Black workers matter” before the council’s vote.
More traditional labor groups, including local affiliates of the AFL-CIO and the hotel and hospitality union UNITE HERE, and groups like the Urban League of Greater New Orleans, also endorsed the measure.
No public opposition to the measure has emerged, possibly because most of those affected by the increase can adjust their contracts to account for the higher wages.
Workers told the council of their struggles making ends meet on the federal minimum wage, though most of those who spoke appeared to work for companies, such as hotels and restaurants, that would not be affected by the new rules, which are set to go into effect in January.
Some of the activists referred to the ordinance passed Thursday as simply a first step and said more is needed, such as the $15 an hour minimum wage being pushed in a national campaign.
A report released Wednesday by The Data Center estimated that a household with one adult and one child in the New Orleans area would need to make about $20 an hour to cover all the costs of living in the area.
Mayor Mitch Landrieu, who still has to sign the ordinance into law, has indicated he supports the measure. With the council’s support, Landrieu last year raised the minimum wage for workers directly employed by the city to $10.10 an hour, part of a national effort to get minimum wages to that level.
The potential cost to the city of ordering contractors to raise their minimum wage is unknown. A financial analysis prepared by the Landrieu administration earlier this summer did not provide hard figures for how many workers would see raises or what the total cost would be to the city or its contractors. Instead, that report only laid out the types of workers who would likely be affected by the ordinance.
While the council has no power over private employers who don’t take city funds, Councilwoman Susan Guidry called on them to follow the city’s example.
“I want to ask all employers in the city to search their souls the way you all have today and ask themselves if they’re doing what they need to do to lift this city up,” Guidry said to the crowd in the council chambers.
Follow Jeff Adelson on Twitter, @jadelson.