Wage debate rages on

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One question seemed to be on a lot of minds when the Detroit City Council held a public hearing on the living wage ordinance, which was approved by voters last November: Why have a hearing now?

Council President Gil Hill requested the hearing that was held last Friday. According to him, it was held to assist nonprofit organizations that say the new ordinance is creating confusion.

But virtually no one came to the hearing asking questions. Instead, the meeting turned into a debate on the merits of an issue already voted into law.

The ordinance, which took effect last December after being approved by a 4-1 margin, stipulates that any business or nonprofit agency that receives $50,000 or more in contracts, grants or economic development aid such as a tax break from the city must pay its workers a minimum of $7.70 an hour plus health benefits, or $9.60 an hour if health benefits are not provided.

One explanation for the hearing would be that opponents of the ordinance are not ready to admit defeat. Council member Brenda Scott made reference to a "movement to stop implementation of this ordinance" by members of the business community lobbying Lansing for legislation that would override the new law.

Asked whether the state has such authority, city attorney Phyllis James said the Legislature "does have the power to enact legislation that could impact local ordinances."

Of immediate concern to some activists was their contention that the ordinance isn’t being enforced. Jerry Goldberg of the Detroit group WorkFairness said his organization has found numerous workers covered by the living wage but not receiving the higher salary due them.

"I challenge the city to start enforcing this ordinance," said Goldberg to the applause of the audience. Council members promised to start looking into the issue of enforcement this week.

Speaking in opposition to the ordinance were representatives from the Metro Detroit Chamber of Commerce and several nonprofit agencies.

Trisha Kinley of the American Society of Employers argued that the market-driven economy, not the government, should dictate wages. She said her organization recently invested $200,000 in a Detroit computer lab and training facility, but warned that if the ordinance remains in place the nonprofit might be forced to "question its decision to remain active in the city."

Ken Kudek, assistant director of Focus:Hope, which provides a highly lauded job training program, said his organization receives $1.2 million in city contracts, but that the living wage ordinance will cost his nonprofit $1.6 million. Given that scenario, he said, "it doesn’t make sense to keep the contracts."

"It makes good sense to have a living wage ordinance," said Nida Donar, executive director of Hunger Action Coalition of Michigan, noting that higher wages cut down on employee turnover and the expense that creates, and that health benefits help prevent employees from getting sick and missing work.

Richard Winslow of ACORN, a nonprofit involved in housing issues, argued that the way to address the claim that Detroit will be unduly burdened by this ordinance is to "make living wage a national issue."

Ed Scribner, president of the Metro Detroit AFL-CIO, which was a prime force in getting the measure on the ballot, pointed out that such laws are already on the books in at least a dozen major U.S. cities, and that studies have shown local economies have not been hurt as a result.

University of Michigan economics professor Thomas Weisskopf told council that an increasing number of professional economists are supporting the living wage concept, and that evidence suggests such ordinances can actually help local economies by leading to increases in productivity.

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