Living Wage Prohibition Is DOA

February 28, 2003
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Gov. Jennifer Granholm will veto legislation to prohibit “living wage” ordinances in Michigan, if and when a bill that recently passed the state House gets to her desk.

The measure would pre-empt existing living wage measures in Michigan by prohibiting local laws that require wages higher than the state and federal minimum wage, now at $5.15 an hour. The bill gained the backing last week of the state House and now heads to the Republican-controlled Senate for consideration.

Granholm, in promising to veto the bill if it passes the Senate, sees the issue as the state infringing on local control, spokeswoman Elizabeth Boyd said. The governor also believes in the premise of living wage laws, Boyd said.

“We believe this is a local control issue and we believe people have a right to earn a decent wage so they can earn a decent living,” she said.

More than 100 communities nationwide have living wage laws. There are 15 ordinances in Michigan, the oldest of which was adopted just four years ago.

Such a measure most recently has received consideration in Holland, where the city’s Human Relations Commission has been analyzing whether to pursue passage of a local living wage ordinance.

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. The wage level is typically set as a multiple of the poverty level, quite often in the $8 to $10 per hour range with health benefits.

Backers of living age laws, mostly labor unions and social service advocates, say they help to reduce poverty and help low-income workers.

Critics of living wage ordinances, consisting largely of business interests, say they degrade a community’s business environment and make an area unattractive to employers looking to locate a new facility. Critics also contend that local market conditions, not government regulations, should set wage and benefit levels.

Testimony from representatives of communities in Michigan that have adopted living wage laws indicated that concern about job losses and creating a hostile business environment “has failed to materialize,” according to a House Fiscal Agency analysis of the bill.

Recent efforts to ban living wage measures in Michigan have failed. A bill that passed the state House in the 1999-2000 legislative session was never voted on by the Senate, and a similar measure introduced the following session never made it out of the full House after it passed in committee.

“It is important that in these times of economic constraint we do everything we can to stimulate a competitive job market for both unskilled as well as skilled workers,” said the bill’s sponsor, Rep. Fulton Sheen, R-Plainwell.  “This legislation provides an opportunity to do just that.”           

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