The Periodic Newsletter of the Dane County Living Wage Campaign - Feb.-March 1998
In November the County Board approved Dane Countys 1998 budget, including County Executive Kathleen Falks $1.17 million living wage initiative. This initiative raised certain human services workers wages to $7.50 an hour.
The Living Wage Campaign aimed to follow this up immediately with an ordinance to make permanent a living wage of 110 percent of the poverty level for a family of four, plus health insurance, for entities holding service contracts with the county and for the county itself. However, upon the advice of several supportive County Board Supervisors and the County Executives office, the Campaign decided instead to address several thorny issues which had become apparent once the ordinance was drafted.
As drafted, the ordinance would have affected various types of employees in unintended ways. Also, as drafted, the ordinance contained a reporting system which the Campaign did not intend. The whole question of health insurance, knotty at best, has been further complicated by the States introduction of BadgerCare which is scheduled for implementation on July 1 of this year.
The Living Wage Campaigns Steering Committee, along with supportive County Supervisors, has been negotiating with the County Executives office and the County Department of Administration to address these and numerous other issues raised by the ordinance. Substantial agreement has been reached on most items and the basic goals of the Living Wage Campaign have remained intact.
One very large issue the cost will probably not be settled until late April. The County is currently preparing a thorough survey of vendors so that County Board Supervisors will have firm cost figures when the ordinance comes before them for a final vote. While a very strong majority of Supervisors expressed support for the Living Wage during the South Central Federation of Labors spring candidate screening process, few could be expected to vote for something without a reliable fiscal note.
While the Campaigns time line has been set back by this change in process, the January 1, 1999 implementation goal is still very likely to be reached. In the meantime, supporters should miss no opportunity to question County Board candidates about their positions on the Living Wage during the current election season.
City Living Wage
Meanwhile, the Citys Living Wage Task Force expects to report out its recommendations for a Living Wage ordinance to the Common Council this spring. Final determinations regarding wages for child care workers, employees of businesses receiving economic development financing (Tax Incremental Financing), and health insurance for all covered workers are still being debated.
Since November, the City Task Forces primary focus has been on finding a creative way to improve wages for child care workers. It was estimated that it would take about $450,000 in direct pay just to bring workers up to $7.50/hr. Instead, a plan, costing much less, which would help parents, city certified centers, and workers, will be proposed.
The Task Force is still working on provisions which would require that a living wage be paid to employees in facilities built/refurbished with TIF assistance. Options for health insurance such as the new state BadgerCare insurance and joining the United Way plans are still being studied.
A recent study of Dane Countys economic health revealed what low wage workers have known for some time despite record growth, working families are still struggling.
The report, conducted by the Center on Wisconsin Strategy, emerged from the Dane County Economic Summit Council, a partnership of business, government, labor and community agencies. Among its key findings was evidence that one in four Dane County workers hold jobs paying at or below the poverty level.
Low wages and economic inequality are issues of major concern for Dane County residents, according to survey findings included in the study. When asked what change would be most important for working families, higher wages/less inequality was the most common opinion expressed. That opinion was expressed by 4 times the number of people who thought that decreasing taxes was a priority.
The facts brought to light by the study support these concerns. Between 1989 and 1996 median income was stagnant, even though Dane County unemployment rates were consistently among the lowest in the state and the nation.
The evidence refutes the argument that unregulated economic growth will automatically lead to improved wages and living conditions and underscores the need for policies like the Living Wage Ordinances that seek to forge a more just relationship between government, working families and the community.
Until now, the silent crisis facing working families with small children has received scant attention as a matter of national policy. With President Clintons new 5-year plan to channel $21.7 billion into federal childcare programs, a major policy debate about what some have called a major national security issue is expected over the next several months.
The core objectives of Clintons plan tax credits for families with young children and businesses providing childcare programs for employees, stricter oversight of the childcare industry, and increased subsidies to low-wage earners are desperately needed. But many childcare advocates are concerned that the cornerstone of high quality childcare, the workforce itself, is being overlooked.
Rights! Raises! Respect!
It doesnt matter how affordable we make child care. If there is not a skilled and stable workforce, quality care and childrens futures will still suffer, said Peggy Haack, a coordinator for the national Worthy Wage Campaign.
Worthy Wage Campaigns are spreading around the country through the grassroots of the childcare workforce in a battle for what many believe is a prerequisite to high quality care fair wages for childcare workers. While Worthy Wage proponents see no single solution to the crisis, their ideas range from incorporating early childhood education into the public school system (a plan not even on the horizon) to unionization of the childcare industry. As Marcy Whitebrook, director of the Center for the Childcare Workforce which is overseeing the Worthy Wage campaigns puts it: Parents cant afford to pay. Teachers cant afford to stay. Theres gotta be a better way.
Haack, a respected childcare authority who still works part-time as a home daycare provider in Madison, attended the President and Hillary Clintons White House Conference on Childcare last fall which set the stage for the Clinton proposals that were featured in his State of the Union Address.
While cautiously optimistic, Haack is concerned that providing more and cheaper daycare may come at the expense of the quality of that care. People are leaving the field all the time because the wages are too low, says Haack. Nationally, turnover rates average 42 percent a year. That is way too high to ensure quality, she says.
At the White House conference Clinton seemed to really get the compensation piece, says Haack, but a lot of work needs to be done to get childcare workers up to a livable wage where the investment in training and skill development will not be lost to turnover.
The only piece of the Clinton plan even remotely tied to compensation is the $1,500 training scholarship for those entering the field who promise to stay for one year.
Haack is working with the South Central Federation of Labor and the Dane County Living Wage Campaign in a ground-breaking effort to make the Living Wage a reality for childcare workers in centers certified by the City of Madison. Haack feels that without a massive outcry to put public money into childcare workers wages it will be a long, uphill battle.
While Haack and the Living Wage Campaign work through the Citys Living Wage Task Force to improve wages locally, Campaign Chair and SCFL President Jim Cavanaugh says the Living Wage concept should be taken to a national level. Working families, unions and childcare advocates should demand that in all situations where this federal money is being used, a Living Wage must be paid to the workers who are directly providing the care, said Cavanaugh.
Haack is particularly concerned with what experts in the field refer to as our bipolar policy disorder provisional care a new category of unregulated childcare created as part of Gov. Thompsons W-2 program. At a time when we are advocating for more stringent requirements and trying to professionalize our work, unregulated care sends us backwards into the dark ages, she worries.
New research studies by child development experts have sounded the alarm that poor quality childcare is directly related to lower social, emotional, physical and cognitive development that often permanently impairs childrens abilities for life. The problems of children who are unprepared or unable to learn wreak havoc in public school systems already squeezed by tight budgets.
Much of the ground breaking research on brain development and child psychology has given intellectual fuel to the grassroots advocates within the early childhood workforce. What began in the early 80s as a movement for pay equity for childcare providers has now grown into a broad based national movement and will be a critical priority for AFL-CIO unions in the coming months.
Local Activities Planned
The AFL-CIO Working Womens department will be organizing two national days of action this spring. On April 3, there will be a National Day of Action for Equal Pay (coordinated with the National Committee on Pay Equity). On May 1, there will be a National Day of Action for Childcare, calling for more money to improve quality and raise the pay of childcare workers (coordinated with the National Center for the Childcare Workforce).
Local activities are in the planning stages now with the area Worthy Wage Campaign and the South Central Federation of Labor. Watch for details.
For more information about National Equal Pay Day, April 3, or Worthy Wage Day, a National Day of Action for Childcare, May 1, contact the South Central Federation of Labor, 256-5111.
Contrary to rhetoric heard during debates over increasing the federal minimum wage, unemployment is not on the rise, nor are consumer prices, as opponents to hiking the minimum wage floor had warned.
Now studies are beginning to show that Living Wage ordinances, like prevailing wage laws for construction firms, can be expected to create stability in the workforce, encourage worker training and give workers the opportunity for a solid career without the negative side effects some say will result.
A study conducted by the Washington D.C.-based Preamble Center for Public Policy, analyzed Baltimores experience with a Living Wage ordinance passed in 1994. The Preamble Centers study found no evidence that the business environment had been negatively affected. In fact, the value of new business investment actually increased in the year following passage of the ordinance.
None of the Baltimore area firms under city contract reported laying off workers, and contract costs actually decreased after the law went into effect. While some of the costs of increasing wages have been passed on to Baltimore taxpayers, it has amounted to only 17 cents per person annually.
Another study by Professor Robert Pollin of University of California-Riverside Economics Department focuses on the low-wage economy of Los Angeles where a Living Wage ordinance was passed in March 1997. LAs Living Wage ordinance will increase wages for over 10,000 workers to $7.50 an hour, up from an average hourly wage of $5.64, at a projected cost of $39.4 million.
The money designated for wage increases amounts to less than one percent of the total budgets ($3.9 billion) for the 850 firms that will be affected by the ordinance. From that and other evidence, the Pollin study concludes that implementation would cause no net increase in the City budget, no employment loss and no loss of city services for the residents of Los Angeles.
In addition, costs associated with the Los Angeles Living Wage ordinance are likely to be diffused by a gradual phase-in as contractual agreements are renewed over a period of several years, reducing the immediate economic impact.
At first glance, economic benefits to affected families will amount to a whopping 33 percent of pretax income. But that figure diminishes to 10.6 percent after all federal, state, and local taxes are accounted for, in addition to reductions in government economic assistance currently being received by the workers and their families.
That modest increase in income is expected to provide greater access to bank loans and other forms of credit that can be used, for example, to purchase a home or automobile or to finance higher education.
Contributing More to Society
Workers who will earn a Living Wage in Los Angeles are expected to reduce their reliance on government assistance by 50.4 percent, yielding substantial benefits to taxpayers, as well as incalculable increases in individual sense of self-esteem. Taxpayers also benefit because more workers will be paying more of their share of taxes to support government services.
The other overall affects that can be expected to benefit the community at-large, according to the LA study, will include a more robust local retail economy; higher rates of home ownership, education and entrepreneurship; and decreasing rates of homelessness and crime.
Given the new high-wage, high-morale climate in the workplace, turnover rates are expected to fall, in many cases by more than half. Along with increasing the quality of work, savings can be recouped in administrative costs for advertising, hiring, training and payroll management. As workers are retained for longer periods and paid reasonable wages, productivity is also expected to rise significantly, according to the study.
The pro-business lobby in all parts of the country are all singing the same chorus of arguments against Living Wage ordinances and minimum wage initiatives: fears of job loss, service cuts and price increases. The LA and Baltimore studies now dispute that conventional wisdom, showing that it simply isnt the case.
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