New Party Report: Making Work Pay

Like most cities around the country, Minneapolis and St. Paul used to hand out millions of dollars in public subsidies to local businesses with virtually no strings attached. Companies were free to take taxpayers' money without hiring a single central city resident. The jobs they generated using that money often paid well below what it takes to keep a family out of poverty.

All that has now changed. Thanks to a hard-fought, 18-month long campaign mounted by the New Party, the Association of Communities Organized For Reform Now (ACORN), and several area labor unions earlier this year, the Twin Cities joined Baltimore, Milwaukee, New York, and a growing list of other municipalities that require recipients of corporate welfare to create jobs that pay a living wage.

On January 2, the St. Paul City Council unanimously adopted a resolution that calls for businesses receiving more than $100,000 in city tax breaks, grants, or other financial assistance to create or retain jobs paying a "living wage" (defined as 110 percent of the federal poverty line for a family of four or roughly $8.25 an hour). It also mandates that 60 percent of new jobs created using such aid go to St. Paul residents and that a special effort be made to recruit low-income people for those jobs.

In March, the Minneapolis City Council followed suit. The version of the policy they passed--over the strenuous objections of the Greater Minneapolis Chamber of Commerce--is even stronger than the one in effect in St. Paul. In addition to a mandated living wage of $8.25 for taxpayer-funded projects, the policy prohibits contracting out current city jobs to companies that don't pay a living wage. It specifies that current contract employees be brought up to a living wage. As Teamster and living wage activist Erik Jensen observed, "This virtually eliminates the ability of nonunion contractors to pit their low-wage, zero-benefit workers against the unionized city worker."

The Minneapolis resolution also gives preference to businesses practicing "responsible labor relations" in the awarding of job training assistance. It develops city purchasing policies to encourage the creation of more unionized, living wage jobs.

Dick Johnson, president of the Minneapolis Central Labor Union, hailed the passage of the policy as a "great victory for the city and its workers."

"These resolutions establish the principle that workers deserve a living wage" said Mary Jo Maynes, chair of Progressive Minnesota, the Twin Cities area New Party affiliate. Living wage policies are a crucial part of the larger effort to rebuild our central cities and create sustainable regional economies. By improving pay for even a small segment of the labor force, they help to raise the local wage floor. We have been told for too long that urban communities can do nothing about the impact of de-industrialization, rising poverty and inner-city joblessness, that our problems are all the result of global competition. The living wage movement has given us and other cities new tools to work with. "

The struggle to attach wage conditions to public subsidies in the Twin Cities began back in the summer of 1995 when activists from ACORN and the New Party gathered the 10,000 signatures needed to put a living wage initiative on the ballot in St. Paul. Among other things, the initiative would have required businesses getting aid from the city to pay workers a wage of at least $7.21 an hour. Denounced as "Stalinesque" and "the mother of all job killers" by the city's Democratic mayor, attacked repeatedly in the editorial pages of the daily newspaper, the measure was the focus of a relentless corporate-financed smear campaign that ultimately outspent supporters 10-1. The well-heeled opposition managed to scare enough people to defeat the measure when it came up for a vote in November.

The issue, however, refused to die. Shortly after the St. Paul initiative lost at the polls, Minneapolis City Council member Jim Niland convinced the city councils of Minneapolis and St. Paul to convene a joint task force to develop recommendations for creating more living wage jobs in the Twin Cities. The task force included members of the labor unions, business owners as well as a few ACORN, and New Party members. The recommendations they ultimately arrived at became the basis for the resolutions passed in Minneapolis and St. Paul.

Though everyone involved in the living wage coalition is pleased with the recent victories, most agree that the policies, as they stand, leave plenty of room for improvement. For instance, Minneapolis's policy doesn't cover publicly-funded projects like retail stores or sports stadiums that are currently defined as "community development."

"The City Council should expand this policy to cover a wider range of businesses," said Martin Goff vice president of Hotel Employees and Restaurant Employees (HERE) Local 17 and a member of Progressive Minnesota's steering committee.

"All levels of governments should use the living wage standard as a guide for public spending," added Maynes." If we are going to kick more and more people off welfare, we need to guarantee that they'll be able to find jobs that pay enough to keep them out of poverty."

As administrative guidelines are developed in the months ahead, living wage supporters hope the policies in Minneapolis and St. Paul will be broadened to cover other kinds of taxpayer financed development. Whatever happens, the success of their efforts so far has already changed the tenor of local political debate dramatically. As Maynes explained, "The living wage campaign has raised the issue of whether or not the Twin Cities can afford to subsidize businesses that pay so poorly that their employees can't make ends meet. Given our scarce resources, shouldn't we try to attract employers who treat their workers with dignity and pay decent wages? It's a question that's not about to go away."

Steve Macek lives in St. Paul, MN and is a active member of Progressive Minnesota. For more information about the New Party or about ongoing Living Wage campaigns, contact the New Party National Office, 227 W. 40th Street, Suite 1303, New York, NY 10018; 800-200-1294; E-Mail: newparty.org; www.newparty.org