Holland Panel Eyes Living Wage

January 24, 2003
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HOLLAND — A city panel should decide by late spring whether to push for a “living wage” ordinance in Holland.

A committee of the Holland Human Relations Commission has explored the issue for about two years and in the coming months plans to visit other communities across Michigan to gauge their experience with local living wage measures.

The panel for now remains undecided on whether to pursue an ordinance for Holland, city Human Relations Director Al Serrano said. Serrano expects a recommendation from the group by the end of May on whether to take the matter further.

“It’s really an investigative venture,” Serrano said. “We’re just kind of exploring the issue and getting educated along the way.”

Living wage laws require the enacting governmental body and contractors that do business with it to pay their employees a set wage that’s considered livable in the community. Some communities also apply the measures to businesses seeking tax breaks, grants or loans.

In Holland’s case, the city appears to pay its employees well, leaving the primary question about pay scale to contractors that do business with the city, Serrano said. The idea behind such measures is that a city “should not contribute to poverty but actually help people earn a ‘living wage,’” he said.

“It’s an issue that’s not going to go away in this country,” Serrano said.

There are presently 95 communities nationwide with living wage laws, according to the Association of Community Organizations for Reform Now, or ACORN. In Michigan, they include Detroit, Taylor, Washtenaw County, Monroe County, Pittsfield Township, Eastpointe, Ann Arbor, Ferndale, Warren, Ypsilanti and Ypsilanti Township.

Measures generally require a “living wage” in the area of $8 to $10 an hour, with health benefits, and sets a threshold for a contractor’s annual revenues before they are affected.

The Holland Area Chamber of Commerce has not taken a formal position on the Human Relations Commission’s deliberations, although it’s watching the process, President Chris Byrnes said. The chamber is working with the committee to gather data on the effects of a living wage ordinance in a community and hopes to stall the issue at that level, he said.

Business groups are generally the biggest opponents of living wage ordinances, arguing that local market forces and labor demands, not regulations, should dictate pay scales in a community. The concern is that a living wage ordinance would hurt the overall business atmosphere in Holland, Byrnes said.

“It affects business at all different levels,” he said. “Anything, where you set artificial wage rates, is going to hurt business, so we have to keep an open eye on it.”

In terms of economic development, a living wage law could cause companies looking to locate a facility in West Michigan to steer clear of Holland, economist George Erickcek said. Such laws could easily prompt firms to look at neighboring communities “that are a bicycle ride away,” Erickcek said.

“You’re simply making your area less competitive than your surrounding area,” he said.

While considering them as well-intended, Erickcek overall views living wage laws as not very effective because they help too few people.

“It addresses the right issue. There are, in my mind, too many low-paying jobs. The problem is it’s the wrong tool for the job,” he said. “It’s more symbolic than anything else.”

Erickcek prefers to see communities put their resources toward encouraging low-income residents to take advantage of the earned-income tax credit on their federal tax returns.           

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