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Archive for Tuesday, August 19, 2003

Living wage is justified

August 19, 2003

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As the City Commission's hearing on the living wage ordinance draws near, the volume of the debate has risen. Critics have made harsh allegations. The Kansas Chamber of Commerce and Industry, for example, accused the Living Wage Alliance of being a stalking horse for a national "big labor" campaign to harm Kansas business, seeking to "double, triple or quadruple" the minimum wage.

The reality is utterly different. In fact, the Lawrence living wage ordinance, scheduled to be discussed at tonight's City Commission meeting, has just one goal. That is, any firm that gets a tax break to locate or expand in Lawrence must pay all its employees at least a living wage, which is defined as enough to keep a family of three 30 percent above the poverty line. In 2003, that's an hourly wage of $9.53 plus benefits.

If companies don't wish to pay living wages, they need not apply for tax breaks. Please note that Kansas law forbids tax abatements for most local merchants, retail outlets and nonprofits. And most years, only one or two firms apply for abatements. So, few firms will be affected.

Who would the ordinance affect? Companies seeking tax breaks that want to pay poverty-level wages. One historic example is the manufacturer Davol, which in 1991 received a tax abatement worth at least $890,000 over 10 years. Davol never met its promised wage or employment levels. Then, just after its abatement expired, Davol announced that it would close its Lawrence plant, sending over 120 jobs to Mexico and Georgia.

This was after 14 consecutive quarters of profit. That year, the CEO of Davol's parent company earned $2.l million plus $657,000 in stock options. Lawrence got absolutely no long-term benefits from the taxpayers' nearly $1 million gift to Davol.

A living wage ordinance would have prevented this from happening. And a raft of national research shows that living wage ordinances in cities work well, for everyone -- cities, citizens, businesses. Poverty falls. Productivity increases. Employee turnover and absenteeism fall.

Living wage ordinances are win-win solutions. But their critics don't see it that way. Shirley Martin-Smith, now president of the Kansas Chamber of Commerce, was Lawrence mayor when Davol received its big tax break. She then called Davol's break the "perfect" tax abatement. Now, the group she heads attacks as "no-biz fanatics" the Living Wage Alliance -- whose proposed living wage ordinance is intended to prevent future Davol fiascoes.

More recently, Lawrence builder David Reynolds claimed (Journal World, Aug. 10); "A living wage does not boost one's self-esteem or financial security." That simply is not true. A living wage raises financial security. And, people feel better in every way when they can provide adequately for their families.

Mr. Reynolds also asks the new commissioners to break the pro-living wage pledge they made during the election. He reminds them that they were "elected to represent all Lawrence citizens, not just a political minority." Maybe he forgets that the commissioners were elected by a majority and their top campaign plank was enactment of a living wage ordinance. Mr. Reynolds was in the minority then and he remains in the minority now. The majority that backed the commissioners in April is still fervent in backing these courageous gentlemen as they move toward enacting the majority's will.

-- Graham Kreicker is a retired businessman and Marine Corps Reserve colonel who was a three-term city commissioner in another state. He belongs to the Kaw Valley Living Wage Alliance.

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