What Is A Living Wage Ordinance?

A living wage ordinance requires employers to pay wages that are above federal or state minimum wage levels and is based on the cost of living for each community. The rationale behind the ordinance is that city and county governments should not contract with or subsidize employers who pay poverty-level wages. Hard work should be rewarded with adequate pay and benefits, and taxpayer dollars should not support jobs that leave workers and families in working poverty. Over 150 cities and counties nation-wide and more than 25 in California have passed Living Wage Ordinances.

How is the Minimum Wage Different from a Living Wage?

The federal minimum wage is the minimum amount that a worker can be paid an hour (currently in 2010, $7.25 an hour) and applies to almost all workers. States may also set a minimum wage that is higher than the federal minimum (California in 2010, $8.00 an hour). Some municipalities such as San Francisco and Santa Fe, New Mexico, have implemented citywide minimum wages that are higher than both the federal and state minimum wage (San Francisco in 2009, $9.79 an hour). Living wages commonly refer to wages set by local ordinances that cover a specific set of workers, usually government workers or workers hired by businesses that have received a government contract or subsidy.

A "living wage" is a self-sufficiency wage which enables a family to pay for housing, medical care, transportation, child care, and food without relying on public or private assistance. The term "living wage" is used by advocates to point out that the federal and state minimum wage are not adequate to enable workers to become self-sufficient.

Why Do We Need Living Wage Ordinances?

The main reason for enacting a living wage ordinance is to reverse the downward trend in wages and incomes for low-wage earners. In California between 1979-1999, the average incomes for the top five percent of the state's families increased by more than fifty percent, while the incomes for the poorest fifth of the state's families fell by one percent, and for the second poorest fifth, incomes declined by five percent.

In California, median hourly wages increased by only 1.3% adjusted for inflation between 1979-2006, barely faster than increases in the cost of living. The percentage of California families, who are the 'working poor' and cannot afford to pay for basic necessities, is 21% in 2005, or one in four families. Meanwhile, the hourly wage of the state's low wage workers or those with earnings at the 20th percentile of the income distribution--declined by 7.2 percent, after adjusting for inflation, while that of California's high wage workers--those with earnings at the 80th percentile--increased by 18 percent.

Living wage ordinances prevent city and county governments from encouraging the creation of jobs that pay wages so low that workers live in poverty. Without living wage laws, governments could contribute to the creation of poverty-level jobs by hiring low-paying contractors or giving businesses tax breaks or subsidies to create jobs without any guarantee that the new jobs will pay a decent wage.

Who is Supporting the Living Wage? What Cities Have Passed Ordinances in Sonoma County?

The Living Wage Coalition is an organization endorsed by more than 60 labor, faith, and environmental, and community-based organizations. The coalition has implemented three municipal Living Wage Ordinances in Sebastopol (2003), Sonoma (2004), and Petaluma (2006).

How Much is a Living Wage in Sonoma County?

The Living Wage Coalition believes a living or self-sufficiency wage for Sonoma County in 2008 is $14.90 an hour (including benefits) and an annual family income of $62,940 based upon calculations for a two- parent, two-child family with both parents working full-time.

The Living Wage Ordinances passed in Sebastopol, Sonoma, and Petaluma mandate a wage of $11.70 an hour with benefits or $13.20 without for covered workers employed by the city, city contractors, and firms receiving economic development assistance. The living wage in these cities is indexed to the consumer price index and each law mandates annual cost of living increases. In 2009, the Petaluma Living Wage was $12.10 an hour with benefits and $13.64
without benefits.

What Are The Costs of NOT Paying a Living Wage?

The cost of working poverty includes:

Family Costs. Low-wage workers often must work multiple jobs to make ends meet and have little time for their children, or for taking classes to improve their skills and job opportunities. Moreover, these workers and their families are less likely to participate in civic affairs or community organizations.

Environmental Costs. Due to low-wages and high housing costs, an increasing number of Sonoma County workers are forced out of the county, increasing traffic congestion and pollution.

Taxpayer costs. Taxpayers are paying twice: once for the city contract, and again for the services needed to sustain families at poverty wages (welfare, food stamps, Medi-Cal, and housing subsidies), Moreover, when workers employed by the city or city contractors do not earn a living wage, the quality of public services tends to decline. In typical low-wage firms employee turnover is high, and training and productivity decreases.

Costs to businesses: Responsible businesses that do pay a living wage are locked out of the municipal contracting process because they can never outbid a large contractor who pays poverty wages. All businesses rely on the public sector for basic services and infrastructure development such as water, roads, energy, and education. Increased demand from low-wage workers for public assistance strains the public sector and negatively impacts business.