A stunning vote by the Los Angeles City Council this past April has given a major boost to cities around the country which may be contemplating living wage legislation as a way to boost the wages of the working poor. The passage of a Living Wage Ordinance, which easily overrode a mayoral veto, was the culmination of a year-long campaign by the Los Angeles Living Wage Coalition. The ordinance mandates a wage of $7.25/hr. with health insurance, or $8.50/hr. without it, plus 12 paid vacation days. It affects companies with City contracts of $25,000 or more, and companies which receive substantial subsidies from the City such as tax breaks, loans or leases on land. Among the approximately 5,000 affected workers are food service workers, security guards, janitorial service workers, and some factory workers.
In passing the ordinance, Los Angeles joins cities such as Baltimore, New York, St. Paul and San Jose, California. But because it contains health care provisions and covers subsidies to companies (the other cities do not), and because a decisive victory for the ordinance occurred despite ferocious business opposition, the Los Angeles ordinance is being seen as a bellwether for other cities.
The months-long debate here, widely covered in the press, helped focus attention on an under-appreciated reality: the massive extent of poverty among the working poor, and on the other hand the lucrative deals and tax breaks that many already overly-wealthy companies enjoy at the expense of the City and its taxpayers. For example, to understand the severity that even the federal poverty line represents, consider that in Los Angeles an average two-bedroom house rents for $855 a month. After the rent is paid, a family of four at the poverty level has only about $450 a month left for all other expenses: food, transportation, clothes, health care and other basics. Fully 35 percent of all workers in the City have incomes below the poverty line. And the working poor in L.A. are getting poorer: from 1979-89 low wage industries here grew by a whopping 40 percent.
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