Out of Control Policy Blog

Group Drops Living Wage Bid Due to City Budget Crunch

A group that has pressed hard for a living wage in Bloomington, Illinois, has dropped its campaign due to the city's tight fiscal situation.  According to an article in the Pantagraph,

Central Illinois Organizing Project announced Wednesday it was suspending efforts to convince the city to pay its workers a “living wage.”

A living wage is considered the rate of pay a worker needs to earn over 40 hours a week to pay for a one-bedroom apartment in the area. For the Twin Cities, that rate is considered $9.81.

Said CIOP member Jack Porter, "We don’t want to be part of pitting one group of workers against another group of workers."

In other words, the CIOP recognizes that imposing a living wage mandate on the city will raise costs, likely leading to layoffs, at a time when the City of Bloomington is already considering layoffs to plug its $5 million budget deficit.  This is a startlingly candid, albeit common-sense, admission from a group that advocates a living wage law.

As with any form of minimum wage, when the costs of doing business are artificially increased, those costs are passed on to workers in the form of layoffs and reductions in work schedules, and to consumers in the form of higher prices.  In the case of government employers, these costs get passed on to taxpayers (and doubly so if the government does not make any corresponding staff reductions, since governments do not have to worry about turning a profit in order to continue to operate).

Porter added, however, that the CIOP would resume its living wage campaign once the city's budget situation improved.  But if the higher service costs and reduced employment that would result from the living wage make it a bad idea now, what makes him think it would be a good idea any other time?

Adam Summers is Senior Policy Analyst


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Comments to "Group Drops Living Wage Bid Due to City Budget Crunch":

chase | March 31, 2009, 12:22am | #

To submit my personal opinion, why is submission of personal information (email, name) mandatory? Anyway, the federal government obviously doesn't give a damn; if they did, rather than raising the minimum wage, they would ease the burden on small companies (by allowing them to have more money to pay wages of workers or expand business and become able to hire more workers) and workers by doing away with the income tax. The minimum wage laws are a way to give the federal government an appearance of doing what's best for the workers, when, in fact, it's merely a front so the greedy, selfish politicians can get their hands on money desperately needed by workers and businesses. There is absolutely nothing that the government can do with your money (or anybody else's, for that matter) that you can't be better done in a free market system with total economic freedom (no taxes or tariffs).



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