City may rethink living wage requirement
A new discussion about tax abatements and other economic development incentives may open up an old discussion about the wisdom of requiring companies to pay a living wage.
City commissioners at their meeting Tuesday agreed to have a study session early next year about whether the city should expand the living wage requirement or perhaps begin backing away from the idea.
“I think the data is starting to show that the results have been pretty mixed on the effectiveness of living wage ordinances,” City Commissioner Rob Chestnut said.
The issue came up as part of a larger discussion of economic development policies at City Hall. Commissioners currently are reviewing how tax abatement requests are processed, and also reviewing policies for new types of incentives, such as tax increment financing and transportation development districts.
Commissioner Boog Highberger said he thinks companies applying for TIFs, TDDs and other new types of public incentives should be required to pay their employees a living wage, which means salaries will be at a level to provide a family of four with income that is at least 30 percent above the poverty level.
“The rationale when we passed this is that we didn’t think it was good public policy to subsidize jobs that pay less than a living wage,” Highberger said. “I think that still makes sense for these new incentives.”
But Chestnut said he wants to gather recent research to present to commissioners that call the concept into question. He said some cities have found that the living wage ordinances have cost their communities jobs and have done little to help low-income workers.
“I think some communities are finding that it is an expensive way to bring wages up,” Chestnut said.
Lawrence has had a living wage ordinance on the books since 2003. The ordinance requires only companies that receive a tax abatement to pay all their employees a living wage. The minimum living wage changes each year as the poverty level is adjusted. This year it equates to $11.
Chestnut said he doesn’t think the living wage requirements should be required for companies that use TIF or TDD incentives, but he stopped short of saying he would lobby to have the living wage requirement removed from the tax abatement policy.
“That’s something the entire commission is going to have to discuss,” he said.
Commissioners tentatively scheduled a study session for Jan. 27 to discuss a variety of economic development issues with the County Commission and the Lawrence Chamber of Commerce.