Until now, the rising economic tide of the longest expansion in US history hadn't lifted Henry Redd's boat: Even with 25 years experience, he earns about US$7.50 an hour as a janitor at a Richmond elementary school.
Next month, Redd will get a raise of as much as a US$1 an hour because Richmond officials have decided to pay their employees what anti-poverty activists call a "living wage." In this case, that amounts to a minimum of US$8.50, which is US$3.35 above the federal minimum.
Inflation has reduced the purchasing power of the minimum wage by 21 percent in the past 20 years, according to a study by the Economic Policy Institute, a Washington-based research organization. Living wage advocates are stepping up a campaign to ensure the benefits of prosperity extend to those at the bottom end of the income scale.
"We're still nowhere near making up any of the gains the low-wage end of the labor market has seen erode over the past few decades," said Jen Kern, lead organizer for wage campaigns run by the Washington-based Association of Community Organizations for Reform Now.
The idea that governments can, or should, guarantee a minimum living standard is controversial.
Low-wage workers have the most to lose as the economy sags and companies cut back, lending a new urgency to the movement, advocates say. Opponents argue such wage laws will increase costs for businesses and city governments when they are less able to afford it, which means lost jobs for some low-skilled workers.
Living wage laws typically require contractors doing business with local governments to pay their workers a specified hourly wage that varies from about US$8 to US$11. The wage usually is set to ensure workers' annual income is above the federal poverty line, now at US$17,650 for a family of four.
Congress is considering a US$1 an hour increase in the minimum wage. Still, more than 70 communities around the country are considering a law similar to Richmond's, even as city budgets tighten and companies continue to cut jobs, Kern said.
Advocates and skeptics agree that some wage laws can help some poor families. The laws boost incomes for low-wage workers, and in turn help reduce poverty rates, according to a study by David Neumark, an economist and visiting fellow at the Public Policy Institute of California.
"Living wage laws do have some benefits," Neumark said.
The increased incomes also help the economy by reducing demand for public services such as Medicare and food stamps and increasing consumer spending, proponents say.
"The more people who pay living wages, the better these businesses do in the long run," Kern said. "You're creating consumers."
Redd is one of 90 workers who will benefit from Richmond's new wage rate. The raise will lift his yearly income above the poverty line, helping Redd pay for day care for his 2-year-old daughter, fill his Oldsmobile's gas tank, and take his fiance out to dinner once in a while.
"It's about time," Redd said. "I really feel that they should have given us more for what we're doing."
Workers aren't the only ones to benefit. Companies have found the laws helped improve their bottom line.
At Pedus Security in Tucson, Arizona, absenteeism fell 80 percent and overtime hours fell to 50 a month from about 600 after a new law forced the company to raise wages for security guards to US$8 an hour from US$6.25, said manager George Corti. The guards who work on city contracts make US$8.26 an hour after a cost-of-living adjustment this year.
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