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Questions and Answers
about the Living Wage
What is a living wage?
What is a living
wage campaign?
What is the Memphis Living Wage Coalition?
Why do we need a living wage ordinance?
What are the main
advantages to a living wage?
What about fringe benefits?
Who pays the increased costs of a living wage?
Which workers are covered by the Memphis and Shelby County living wage ordinances?
What is a living wage?
A living wage, as opposed to the
minimum wage,
is one that is enough to lift a worker and his or her family out
of poverty.
The current federal minimum wage is $5.85 an hour. At this level,
a full-time,
minimum wage worker earns only $12,168 a year. In 2007, the
federal poverty
level is $20,650 per year for a family of four. Additionally,
most poverty experts
consider the federal poverty level to be set at too low a
level. Dr. David Ciscel’s
study “What is a Living Wage for Memphis?”
finds that a single parent with one
child would need to earn $26,128 per year to meet basic
needs in Memphis.
The Memphis Living Wage
Campaign defines a living wage as 104 percent of the poverty
level for a family
of four when health insurance is provided by the employer, or 120
percent of the
poverty level when insurance is not provided. In 2007, this equals $10.02
an
hour with benefits, or $12.01 per hour without benefits.
What
is a living wage campaign? In
more than one hundred communities across the
country, living wage
ordinances have been passed as a
way for local governments, school
districts, and universities to address
concerns about the working poor. A living
wage campaign works to pass
legislation that requires companies to pay a living
wage to their workers in
order to receive city contracts or economic development
subsidies from local government. Companies that pay poverty wages should not
benefit from taxpayer
dollars, and local governments should not pay their own workers poverty wages.
What is the
Memphis Living Wage Coalition?
The Memphis Living
Wage Coalition
includes forty-two member groups: congregations and faith groups,
community organizations, and labor
unions, as well as concerned individuals. Any
organization, individual, or
business that supports the goal of passing a Memphis
living wage ordinance
may
join. The coalition believes that everyone who works should
earn wages high
enough to keep them out of poverty.
What are
the main advantages of a living wage?
Living wage laws
help
ensure that workers and their families maintain at least a minimal standard of
living and that the benefits of economic activity are spread throughout the
community.
Living wages benefit not only those who earn them, but often,
workers at many
different wage levels see their incomes increase as the wage
floor is pushed upwards.
Living wages benefit the economy because low-income
families, in meeting their
basic family needs, will spend any increase in their
wealth in the local economy in
grocery stores, the housing market, clothing
stores, etc. The living wage
also benefits the community by reducing the costs
of public assistance.
What about
fringe benefits?
Because of federal law,
living wage
ordinances cannot require that employers provide health coverage.
However, the Memphis and Shelby County living wage ordinances require
city
and county contractors to pay a
higher wage level - at least $12.00 an hour for
2007- to workers who do not have
employer-provided health insurance.
Who pays
the increased cost of a living wage?
The evidence
from other
cities that have living wage laws indicates that most of the costs of
living
wage ordinances are absorbed by businesses through reduced
training and
recruitment costs or by small reductions in profits. For most
businesses, the
cost of raising their bottom wage levels is only a small
fraction of their
budgets.
Evaluations of living wage laws also found no
significant
evidence of job loss,
and the costs of contracts for the city increased by
only insignificant
amounts. Where there may be small increases in costs to
taxpayers (primarily
because of city workers’ wages being raised by
the ordinance), there will likely
be an accompanying reduction in the cost of
public assistance for low-wage workers that taxpayers currently bear.
Which workers are covered by the Memphis and Shelby County living wage
ordinances?
Living
wage legislation passed by the Memphis City Council and the Shelby
County
Commission mandates that the following workers be paid
living wage rates:
Full time City of Memphis employees:
At least $10 per hour and health benefits
Part time and
temporary City of Memphis employees: At least $12 per hour
(beginning July 1, 2008;
previous to this the rate is $10 per hour).
Workers on City of Memphis service contracts and Memphis Light, Gas,
and Water service contracts:
At least $10 per
hour if health insurance is provided, or $12 per hour without insurance*
All Shelby County employees: 104% percent of the federal poverty line
(in 2007: $10.02 per hour)
if health insurance is provided, or 120% of
the poverty line without insurance (in 2007: $12.01 per hour.)
Workers on Shelby County contracts: 104% percent of the federal poverty line
(in 2007: $10.02 per hour)
if health insurance is provided, or 120% of
the poverty line without insurance (in 2007: $12.01 per hour.)*
Workers at companies receiving new property tax freezes from the
Memphis/Shelby County Industrial Development Board:
At least $10 per hour if the workers' job is being created after the tax freeze. Health insurance must be provided
to all workers at the facility.
*Memphis and Shelby County service
contractors must begin paying the living wage law when they
renew their
contracts or initiate a new contract. Contracts worth less than $10,000
are exempt from the Shelby County ordinance.
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