Archived Sections, Commentary

The Living Wage is a Matter of Justice

Tax subsidies supporting low-wage, no-benefit jobs will only hurt everyone

One value that the labor movement and people of faith share is the imperative to respond to persons in need. Because social and economic justice is our common mission, we are compelled to seek solutions to the problems that cause need in the first place. That’s why we now are working together to pass a meaningful living-wage ordinance in Saint Paul.
In today’s world of part-time employment and low-wage jobs, more than 15% of our community officially lives in poverty. These are the “working poor.” In trying to support themselves, many of these work two and three jobs to make ends meet. Paul Wellstone used to say that anyone who worked 40 hours a week, year-round, should be able to support his or her family without relying on public assistance. Sadly, that’s not the case today.
Even official federal measurements — the poverty guideline and the minimum wage — give a misleading picture of the true cost of getting by. Poverty guidelines are based on an outdated 1963 formula extrapolated from the cost of food in a family budget. Since that time, the cost of housing, fuel and child-care, for instance, have increased significantly faster than food prices. But the poverty formula doesn’t reflect that. In reality, the shift means that families earning almost twice the “official” income threshold still live in poverty.
Some would argue that the minimum wage is supposed to be the social safety net. Unfortunately, the minimum wage is a poverty wage. It’s not a wage that families can live on. It doesn’t protect families from the devastation of a medical crisis. It doesn’t even keep up with inflation. If it did, the minimum wage today would be $9.12 an hour. It’s not. It’s only $6.15 in Minnesota, $5.15 nationally.
What we must move toward is a true living wage — a wage that supports self-sufficiency.
The City of Saint Paul presently is considering a living-wage ordinance. Similar to one Minneapolis passed last year, it would require businesses that receive city subsidies to pay their workers a living wage. Supporters of the ordinance, including labor unions and faith communities, want to make sure that, when the city spends taxpayers’ money or gives tax breaks for development projects, the tax money creates real jobs that provide a wage people can live on.
The draft ordinance requires companies that receive these public subsidies to pay workers a wage that is 130% of the federal poverty guideline for a family of four, or $12.09 per hour. If the company provides health care, the wage requirement would be reduced to 110% of the poverty guideline, or $10.23 per hour. The proposed ordinance also would apply to many city contracts.
Some have argued that any private economic development that creates jobs should not be hindered by wage requirements, even if those developments receive a public subsidy. The truth, however, is that tax subsidies supporting low-wage, no-benefit jobs will only result in those workers having to rely on public assistance. Both taxpayers and workers deserve better than that. And what that means is that these jobs give workers a way truly to stand on their own.
A strong, enforceable living-wage ordinance is a necessary step in that direction. It is also a matter of justice. It is a step that unions and the religious community can and should take together.