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February 18, 2003
Thank you for allowing me to testify before you today. I would like to commend Rep. Dale Swenson for his continuing commitment to the living wage and his concerns about the use of
Kansas taxpayers money.
The living wage movement began in 1994 when religious leaders in the city of Baltimore realized that growth in low wage employment, fueled by privatization of city services and by
the city’s economic development practices, forced working families to rely increasingly on area churches for help to make ends meet. The living wage movement is the grassroots response to the governmental
practice of rewarding companies with subsidies and contracts without regard to the well-being of those companies’, their workers, and the overall impact they have on our state and communities.
A “Living Wage” policy establishes an absolute minimum level of pay that is higher than the state or federal minimum wage.
It is usually calculated on what salary it takes to raise a typical family of three or four just above poverty level. The federal government standards by the Census Bureau sets the benchmark at $9.39 per hour, 130 percent of the federal poverty line, for a family of three. Living wage laws cover only those companies that receive local or state government contracts, subsidies, and /or tax breaks and economic development funds.
Two premises underlie a living wage: First, citizens who work for a living should not be poor; and second the government should not subsidize low-wage business practices of
employers with taxpayers dollars. Instead taxpayers’ dollars should go to creating good jobs that pay well-jobs that pay at lease a “living wage.”
A living wage translates into higher wages for workers at the bottom, enabling many to pay for doctor visits, kids clothes, groceries, education, and other expenses that were
previously beyond their reach.
Passing living wage legislation places the burden on low-wage paying employers. It sends a strong message that the state will no longer use taxpayer money to subsidize low-wage business strategies.
A living wage can play an invaluable role in creating and changing the dialog about economic fairness and corporate accountability. Please ask yourself:
1. What is the state’s role in supporting and providing good jobs ?
2. Does a state have the right to expect certain standards from companies doing business with and for them ?
3. With today’s economic crisis how are businesses with low paying jobs affecting our state’s tax base ?
4. Are any of these low-wage paying businesses also receiving state subsidies, tax incentives or economic development funds ?
One hundred and three (103 ) cities and counties are currently enforcing a living wage.
The research is clear that a living wage does offset poverty. For example research by the Economic Policy Institute and the Preamble Center for Public Policy several years later has shown that Baltimore taxpayers were, in effect, subsidizing low-wage business practices through the city’s policy on contracting, subsidies and tax abatements. Churches and charities were picking up the tab at the back end. Passing the ordinance did not show any evidence of significant job loss, increase in contract costs, and does not mark a community or state known as being anti-business. In fact, Minnesota, with some of the toughest laws had one of the largest increase in new jobs in the country in 2002. Minnesota’s provision include “claw back” legislation-allowing the state to recoup tax abatement, subsidies and economic development money if a company leaves or sends jobs out of state, or does not meet the state’s job-creation and wage targets within two years.
A newly released study, by the Public Policy Institute of California shows living wages actually reduce poverty. David Neumark, economics professor Michigan State University and
no friend to minimum wage increases or living wage recently stated about living wage laws, “If someone’s getting up on a soapbox saying these are a disaster, they may believe it, but there’s really no evidence.”
According the United State Conference of Mayors’ Status Report on Hunger and Homelessness in American Cities 1998, 37% of all adults requesting emergency food assistance were
working. Officials in 4 out of 5 cities surveyed identified low-paying jobs as the primary cause of hunger. The Mayors also reported that 22 percent of the homeless were employed.
A living wage can play an invaluable role in creating or changing the community dialog about economic fairness and corporate accountability. I speak to community groups all around
our area about the importance of a living wage and all believe that the state has a high established standard for contracting, tax abatements, economic development and tax subsidies and they are truly shocked when they learn there are minimal to no criteria established for use of these taxpayers dollars. As one man recently put it: Who’s guarding the cookie jar?
Respectfully Submitted,
By Sue Ledbetter, Board Member Community Action Network of Wichita
and Director Wichita/Hutchinson Labor Federation, AFL-CIO
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