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Living Wage Laws in Practice the Boston, New Haven and Hartford Experiences

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Living Wage Laws in Practice the Boston, New Haven and Hartford Experiences Living Wage Laws in Practice The Boston, New Haven and Hartford Experiences MARK D. BRENNER STEPHANIE LUCE LIVING WAGE LAWS IN PRACTICE The Boston, New Haven and Hartford Experiences Mark D. Brenner, Assistant Research Professor, PERI & Stephanie Luce, Assistant Professor, University of Massachusetts-Amherst Labor Center Amherst, MA: University of Massachusetts, Political Economy Research Institute About the authors Mark Brenner is an Assistant Research Professor at the Political Economy Research Institute at the University of Massachusetts-Amherst. He is a nationally recognized expert on the economic impact of living wage ordinances, and has participated in living wage policy formulation in cities around the country: including Los Angeles and Santa Monica, CA; New Orleans, LA; and most recently Santa Fe, NM. He is currently exploring the challenges involved in defining and measur- ing a living wage in a global context. Stephanie Luce is an Assistant Professor at the University of Massachusetts-Amherst Labor Center. She is the author of Fighting for a Living Wage (Cornell University Press), and co-author with Robert Pollin of The Living Wage: Building a Fair Economy (New Press). She has also researched the effects of globalization on jobs and workers, including work tracking the global movement of jobs. Prior to the Labor Center, she worked at the U.S. Department of Labor, the Center on Wisconsin Strategy, and the Political Economy Research Institute. Copyright © 2005 POLITICAL ECONOMY RESEARCH INSTITUTE Gordon Hall / 418 N. Pleasant St., Suite A Amherst, MA 01002 http://www.umass.edu/peri ISBN: 0-9768594-0-8 ii Table of Contents CHAPTER 1: The National Living Wage Movement and the Laws in New Haven, Boston, and Hartford ............................................................................................... 1 The Link between Privatization and Living Wage Laws ....................................................................................................... 2 The National Living Wage Movement ............................................................................................................................................ 3 The Living Wage in New Haven, Boston, and Hartford ....................................................................................................... 8 CHAPTER 2: The Impact of Living Wage Laws on City Contracting ....................................................... 15 The Record in Other Cities ............................................................................................................................................................... 15 How We Approached Our Three Cities .................................................................................................................................... 17 The Impact of Living Wage Laws on Bidding Patterns ....................................................................................................... 19 Expanding the Bidding Pool: Security Guard Contracting in Hartford ..................................................................... 21 The Impact on Contract Costs in Our Three Cities ........................................................................................................... 24 How Unit Costs Change under Living Wage Laws.............................................................................................................. 26 Do Living Wage Laws Force Cities to Curtail Services? ................................................................................................... 27 CHAPTER 3: The Impact of Living Wage Laws on Firms ............................................................................ 29 How We Conducted Our Survey .................................................................................................................................................. 31 A Profile of Boston’s Covered Firms ............................................................................................................................................ 32 Comparing Firms That Raised Wages and Those That Did Not ................................................................................... 34 How the Two Groups Reacted to the Living Wage Law .................................................................................................. 37 CHAPTER 4: The Impact of Boston’s Living Wage Law on Workers ........................................................ 45 Defining a Poverty Threshold ............................................................................................................................................................ 46 A Profile of Covered Workers in Boston .................................................................................................................................. 49 The Impact of the Living Wage Law on Wages and Earnings ........................................................................................ 56 The Impact of the Living Wage Law on Employees’ Quality of Life........................................................................... 62 Employees’ Benefits and Job Satisfaction .................................................................................................................................... 63 The Overall Impact of the Law on Workers ........................................................................................................................... 64 CHAPTER 5: The Impact of Living Wage Laws and Their Implications for Government Policy ..................................................................................................... 69 Living Wage Laws and City Service Contracting ................................................................................................................... 69 The Impact of Living Wage Laws on Firm Behavior and Profitability ........................................................................ 71 The Impact of Wage Floors on Poverty and Wage Inequality....................................................................................... 72 Beyond the Living Wage ...................................................................................................................................................................... 73 APPENDIX 1: U.S. Living Wage Ordinances ............................................................................................................................ 77 APPENDIX 2: How Consolidating Services Can Influence Contract Costs ......................................................... 81 APPENDIX 3: Survey of Covered Firms in Boston ............................................................................................................. 83 APPENDIX 4: How Many Workers Received a Raise under Boston’s Living Wage Law?............................. 91 APPENDIX 5: Basic-Needs and Self-Sufficiency Standards ............................................................................................. 92 APPENDIX 6: How We Surveyed Boston Workers ........................................................................................................... 94 APPENDIX 7: A Profile of Low-Wage Workers in Boston .......................................................................................... 104 REFERENCES .......................................................................................................................................................................................... 111 iii PERI Living Wage Resources Brenner, Mark D. “The Economic Impact of the Boston Living Wage Ordinance.” Industrial Relations 44 (1): 59-83. January 2005. Brenner, Mark D. “Can We Define a Global Living Wage? The Example of Mexico.” PERI Working Paper. 2005. Brenner, Mark D. “The Economic Impact of Living Wage Ordinances.” in Deborah Figart, ed., Living Wage Movements: Global Perspectives. New York: Routledge. 2004. Brenner, Mark D. “Defining and Measuring Living Wages in a Global Context.” PERI Conference Paper. 2002. Brenner, Mark D. “Expanding Health Care Coverage Using Living Wage Ordinances: New California Law Paves the Way for Expansion.” PERI Research Brief 2002-1. Brenner, Mark D., Jeannette Wicks-Lim, and Robert Pollin. “Measuring the Impact of Living Wage Laws: A Critical Appraisal of David Neumark’s How Living Wage Laws Affect Low-Wage Workers and Low-Income Families.” PERI Working Paper Number 43, 2002. Luce, Stephanie. Fighting for a Living Wage. Ithaca, NY: Cornell University Press. 2004. Pollin, Robert. “Evaluating Living Wage Laws in the United States: Good Intentions and Economic Reality in Conflict?” Economic Development Quarterly, Vol. 19, No. 1, pp. 3-24. February 2005. Pollin, Robert. “Testimony on Proposed Santa Fe, New Mexico Living Wage Ordinance.” PERI Research Report Number 6, 2003. Pollin, Robert. “What Is a Living Wage? Considerations from Santa Monica, CA.” Review of Radical Political Economics. Vol. 34, No. 3, pp. 267-73. Summer 2002. Pollin, Robert and Mark D. Brenner. “Economic Analysis of Santa Monica Living Wage Proposal.” PERI Research Report Number 2, 2000. Pollin, Robert, Mark D. Brenner and Stephanie Luce. “Intended versus Unintended Consequences: Evaluating the New Orleans Living Wage Proposal.”Journal of Economic Issues. Vol. XXXVI, No. 4, December 2002. Pollin, Robert, Mark D. Brenner, and Jeannette Wicks-Lim. “Economic Analysis of the Florida Minimum Wage Proposal.” PERI Published Study Number 17, 2004. Pollin, Robert, Justine Burns, and James Heintz.
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