NS ORD-1997-013 Living Wage Ordinance

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APPENDIX 5. 45 The Baltimore Living Wage Ordinance In December 1994 the Solidarity Sponsoring Committee (SSC), a group of low-wage service workers, successfully campaigned for a mandatory living wage for employees of city service contractors. The committee was organized by BUILD (Baltimoreans United in Leadership Development), a largely church-based community organization affiliated with the Industrial Areas Foundation, and AFSCME(the American Federation of State, County and Municipal Employees). The Baltimore Living Wage ordinance, which went into effect in July 1995 (fiscal year 1996), established a minimum wage of$6.10 per hour for anyone working on a city service contract. In July 1996, the wage was increased by Baltimore's Board of Estimates to $6.60. The living wage ordinance stipulates that the wage be increased annually, upon approval by the Board of Estimates, until it equals the amount required to raise a family of four above the poverty line. In subsequent years, the wage is to be indexed to inflation in order to keep it above the poverty line. The ordinance aims for a living wage of $7.70 (the projected poverty level income for a family of four) for 1999 (see Figure 1). The living wage ordinance establishes an enforcement mechanism and imposes significant penalties on contractors who violate the wage requirement or fail to submit proof of compliance. Contractors are required to submit payrolls on a biweekly basis to the Wage Commission for enforcement purposes. They can be fined $10.00 per day for each day their payrolls are late. If a service contractor is found to be noncompliant with the wage requirement, it must remit back pay to the employees and pay fines to the city. Any violator of the ordinance can be made ineligible for city contracts for a year. If a contractor is noncompliant on more than three contracts in a two-year period, it can be barred from bidding on contracts for three years. There is, however, an exception in the ordinance that exempts those companies awarded contract extensions from the living wage requirement. Extension options typically range from one to four years and "grandfather" the wage requirement in force at the time the contract was awarded. The adoption of the living wage ordinance was a response to the deepening impoverishment of low-wage earners in the city of Baltimore. Church leaders saw a sharp increase in the number of working people relying on social service ministries for food and housing. An increasing number of these poor families were headed by low-wage earners, rather than the unemployed or welfare recipients. In Baltimore, BUILD argues, the proliferation of poverty-wage jobs was spawned by the subsidized refurbishing of the downtown sector as well as the privatization of work by the city government. The job growth brought by subsidized businesses was concentrated in low-wage, temporary occupations like janitors and lawn cutters. And government privatization often relegated workers to contingent employment paying low wages and offering few, if any, benefits. In order to reverse this trend, the SSC campaigned for a mandatory living wage for employees of city contractors, arguing that taxpayers' money should not be used to promote the creation of poverty- wage jobs. Workers benefitting from the living wage ordinance include janitors, food service employees, laborers, machine cleaners and repairmen, stenographers, carpet cleaners and repairmen, and bus drivers and aides hired by the city. 6