A Cleveland ordinance meant to ensure a "living wage" of $8.70 an hour
to employees of firms getting city contracts is poorly policed and has a
loophole allowing companies to escape.
So concludes a critical report by Policy Matters Ohio, a local think
tank, that will be announced today at a news conference by Mayor Jane
Campbell and labor leaders. The report measures the impact of the living
wage ordinance passed in June 2000 during the last term of former Mayor
Michael White.
"It appears that the past administration did not strenuously enforce
the living wage law and that there are some incredible weaknesses in how
they implemented it," said John Ryan, executive secretary of the Cleveland
AFL-CIO.
Economic Development Director Chris Warren, whose department
administered the law, deferred comment because of the news conference.
The study says the ordinance's track record has been feeble because:
A board overseeing the law failed to prepare a notice for employers to
post that informs workers of their rights. Board Chairman Gerald Meyer,
senior director at the Greater Cleveland Growth Association, declined
comment because he had not yet read the study.
The city failed to enforce paperwork requirements for employers,
effectively negating some provisions.
Weak reporting requirements for companies and the lack of
follow-through by the city meant enforcement was lacking.
A flaw in the legislation's wording excluded companies that otherwise
would have to comply.
The law covers not only city workers (only about 100 were not already
getting a living wage), but also full-time employees of certain businesses
with at least 20 employees that get financial assistance such as tax
abatements, low-interest loans or grants.
Often, however, the financial aid is given to a limited liability
company, which then uses it for the actual beneficiary - say a
manufacturing plant. The factory, even if it has hundreds of workers,
wouldn't have to pay a living wage.
Only 328 employees of janitorial, waste hauling and other service
companies have fallen under the law's provisions. Service companies are
not required to submit payroll information, so it's not clear how many of
those workers had already been paid $8.70 or more per hour. The living
wage rate is scheduled to rise to $9.20 in October.
Companies getting financial assistance are required to submit payroll
records. Just one company was affected in that category: Vocational
Guidance Services, which trains workers for various occupations. It had 12
employees who got raises because of the law.
Dave Focareta, the study's author, said that if the legislation were
properly enforced, in a few years 3,000 to 4,000 employees a year would
get a living wage as a result.
Cleveland's law followed similar legislation in places ranging from Los
Angeles to Ypsilanti Township in Michigan.
The movement has gained momentum as a way to combat urban poverty.
Opponents, though, argue that businesses forced to pay higher wages will
cut jobs or replace the very low-wage workers it was designed to help with
more qualified employees attracted by higher pay.
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