Challenges

Living wage campaigns inevitably meet strong opposition from some members of the business community and local Chambers of Commerce.  The best defense is a strong offense.  Ensure that the research is sound and reliable; that the coalition works together; and that the community understands how it can be impacted by the provision.  Recruit community-oriented businesses in favor of the provision to articulate their case.

Opposition Positions

Opponents often use fear tactics to fight a living wage.  Some of the more standard arguments against living wage provisions include:

"Job loss."   Opponents warn that increased labor costs will cause contractors to "cut costs" by decreasing their workforce.  Advocates show how good paying jobs lead to greater purchasing power and to stimulation of the economy and greater job creation.

"Higher taxes."   The opposition may warn that living wage requirements will lead to higher taxes as employers pass on costs to the government in the form of more expensive contracts.  In analyzing the impact of the living wage in Baltimore, the Economic Policy Institute (EPI) found no significant increase in contract costs as wages comprised only a small portion of an employer's total expenses.  The 1.2 percent cost increase identified for the examined contracts was less than the rate of inflation for the same period.

"Unfriendly to business."  Opponents may argue that living wage provisions create a "hostile business climate" that will lead to capital flight and a chilling effect on business development.  Proponents counter these arguments with evidence that higher wages lead to higher productivity and lower turn over rates. 

"High compliance costs."   Opponents may site taxpayer burdens of new costs to monitor and enforce employer compliance with the law.  A study of Baltimore's living wage law, which covers more than 1,500 workers, found that administrative costs amount to less than $.17 per taxpayer per year.

"Minimum wage earners are teenagers."   The opposition often depicts

"Nonprofits will suffer."   The opposition may claim that living wage provisions will hurt nonprofits who provide critical services to vulnerable communities.  Some cities, such as Ypsilanti, Michigan exempt nonprofits that can prove that they will be unduly harmed.  Suffolk County, on the other hand, does not exempt nonprofits; rather the living wage coalition included a provision to subsidize nonprofits to help them pay living wages.

"Interferes with free market."   Opponents often emphasize the need for free market forces even as they avail of government support through tax breaks, subsidies and other assistance.  Proponents contend that the government has a role in ensuring worker safety and work standards.

"Makes jurisdiction uncompetitive."  Opponents site the adoption of a living wage as a negative impact for that jurisdiction, as it will create higher costs of business than adjacent jurisdictions.  However, businesses consider many factors when deciding on location.  More important than wages to maintaining a competitive edge is location, worker productivity, and access to markets.

Opposition Tactics

Opponents usually utilize two strategies: legal tactics and legislative preemption.

Legal challenges

St. Louis, Missouri voters overwhelmingly approved the city's living wage measure in the August 2000 elections (77% to 23%).  In November, business groups including the St. Louis Regional Chamber and Growth Association secured a temporary restraining order blocking the ordinance.  The lawsuit ultimately resulted in a decision granting cities in Missouri the power to enact living wage laws, while prohibiting the city from implementing the current ordinance.  The judge stated that the ordinance was too vague and that businesses had legitimate concerns on the "manner of compliance in the matter of health insurance".  St. Louis's living wage coalition, propelled by the support it received from voters, is working to introduce a better-defined provision to city council. 

A Berkeley, California ordinance covers subsidies, contracts, and businesses in the Marina Zone that have six or more employees and $350,000 in gross revenues.  Skates By the Bay, a posh restaurant in the Marina zone, is suing the city to overturn the ordinance.  In Santa Monica, one of the hotels in the area's Costal zone has threatened a similar suit.

Legislative Preemption

Expect business groups to wage early campaigns to stop living wage efforts.  In Denver, while a coalition was gathering petitions for a citywide living wage initiative, business groups pushed a bill through the state legislature that prohibited local jurisdictions from setting their own minimum wage laws.  The state labor council led a lobbying effort that ultimately convinced the governor to veto the bill, paving the way for the Denver City Council to vote 12-1 in favor of adopting a living wage requirement. 

Following passage of the living wage in Alexandria, Virginia, business groups turned to the state legislature to have the state overturn the City Council's decision.  With backing from the living wage coalition, the City Council of Alexandria convinced the legislature to allow local control.

In Santa Monica, California, the owners of seven major luxury waterfront hotels named themselves "Santa Monicans for a Living Wage," and placed Measure KK on the November 2000 city ballot.  Measure KK would establish a living wage for less than 250 of the city's low-wage contract workers, and prohibit the council from enacting any future living-wage ordinance, such as the ordinance they were advancing that would apply to the more than 2,000 low-wage workers employed in the hotels and restaurants.  The KK campaign spent nearly $1,000,000.  In the end, Santa Monicans voted 77% in opposition to the measure.