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Campus Living Wage Manual

II. Background:
The Living Wage Movement

The passage in 1994 of Baltimore's living wage ordinance sparked a movement for economic democracy that is currently sweeping the nation. This movement is uniting labor, community organizations, religious groups and others in an effort to see that our nation's most vulnerable are not left out of the "booming economy." Since 1994, living wage activists have won grassroots victories across the nation.

Municipal living wage campaigns demand that companies receiving public money create jobs that pay a living wage, preventing tax dollars from being used to pay poverty-level wages for hard working families. Even in this economy, many working families are still living in poverty. Ensuring that public funds go toward creating living wage jobs is a step towards closing the gap between those who are enjoying the fruits of the current economy and those who are not.

Living wage campaigns help to build and strengthen a broader movement for economic justice and democracy. They mobilize coalitions of activists and organizers to demand from corporations and elected officials that "economic development" truly means what it says. Living wage campaigns strengthen institutions that build power for working families by uniting labor unions, community organizations, religious groups and others in a struggle for economic justice.

Certain fundamental economic realities surround and drive the living wage movement. The declining purchasing power of the minimum wage is foremost among them. The current federal minimum wage of $5.15 an hour has much less purchasing power than it did at its peak in 1968, despite increased productivity of the workforce. Had the minimum wage kept pace with productivity gains since 1968, it would be $11.20 today instead of $5.15, according to Robert Pollin's and Stephanie Luce's book The Living Wage. At $5.15 an hour, a full time minimum wage worker earns $5,948 less than the $16,660 poverty line for a family of four in 1998. And despite the common media portrayals of teenaged minimum-wage workers, most minimum-wage workers are adults trying to raise a family.

The decline in the real value of the minimum wage has helped to pull down wages up and down the spectrum. In 1998, average workers were earning less, adjusting for inflation, than they did when Richard Nixon was president.

The response to these facts from the business community generally has been, "Well, if we do what you propose and raise wages at the bottom, we won't remain competitive in the global economy." But raising wages at the bottom would have little to no effect on global competitiveness, since most low-wage occupations in the U.S. are found in the service sector. Services are mostly free from foreign competition because the U.S. cannot import housekeeping, janitorial, and fast-food work the way it can import cheap clothes, toys, and electronics from low-wage countries. Recognizing this, most other industrial nations do not view holding wages down as a sensible long-term strategy to increase their competitiveness - they prefer to focus on improving productivity by investing in building a skilled workforce.

The "competitiveness" argument is really a conscious choice to embark on a "low road" business strategy that squeezes as much as possible out of workers in an attempt to boost short-term profits. More and more, municipalities across the nation are also following this "low road" economic development policy. These municipalities believe that unless they offer lower taxes, limited governmental regulation, and other incentives to create what business calls "a business friendly environment," they will not be able to attract businesses into their communities. This strategy ignores quality of jobs in favor of quantity. The give-aways to these businesses in the form of tax abatements and other incentives usually come with no strings attached, no accountability, and can often lead communities into a "race to the bottom" to see which can find the lowest road to attract businesses into their communities.

The alternative to this race to the bottom is to embark on a "high road" strategy of economic development, part of which is campaigning and winning a living wage for jobs where public money is involved. A living wage says that the quality of jobs in a community matters at least as much as the quantity. A living wage creates a "family/worker/community/business friendly" environment where all who contribute to an economy can benefit. A living wage makes it more difficult for "low road" practices to take hold in our communities and helps already existing "high road" businesses thrive. A living wage creates, builds, and strengthens a movement for economic justice and democracy in our communities and in our nation, so that all boats may rise with the tides of a strong and healthy economy.

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