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Living-wage laws can hurt workers and employers

Los Angeles is about to join the list of three dozen or so counties and municipalities that subscribe to what is called a "living wage." These are local laws that require contractors that do business with local governments to pay their employees a "living wage."

The so-called living wage varies from place to place but in all cases rises above the federally mandated minimum wage. Contractors must offer employees the living wage in order to be able to bid on contracts with those local government agencies that require it.The current federal minimum wage is $5.15 an hour, with Democratic plans mulling about in Congress to raise it to $6.15 over one year and Republican plans to raise it to that level over three years.

According to National Public Radio, the higher living-wage levels vary from $6.25 an hour in Milwaukee to $9.46 an hour under Los Angeles' proposed law, to $10.25 an hour in upscale San Jose, Calif.

Before more cities and counties hop on board the living-wage wagon, voters should recognize the downsides of these well-meaning but counterproductive plans. They are nothing more than a back-door attempt by local governments to foist on small businesses the burdensome costs of high wages for low-skilled work that local governments contracted out.

The reason these tasks are now performed by small independent contractors rather than by government workers, as they used to be, is that governments "privatized" them so they could get out from under unmanageable financial burdens. Living-wage laws primarily apply to janitors and other low-skilled workers at schools and public hospitals.

The National Federation of Independent Businesses has several more arguments against the living wage. The first is that by artificially inflating the wage contractors must pay to workers with no or few skills, contractors can't afford to pay as many workers.

The second point the NFIB argues is that when wages for low-skilled workers are artificially inflated by government contract requirements, contractors raise the minimum hiring requirements. In other words, if they are forced to pay $9 or more an hour, they would require job applicants to have a high school diploma or GED, excluding the lowest-skilled workers from getting these jobs in the first place.

None of this is meant to bash janitors and other low-skilled workers, who toil intensively in the most distasteful of circumstances. But America is or should be a place where unlimited opportunity is offered as long as one works hard to educate and better oneself.

Cities and counties should be in the business of offering low-skilled workers educational opportunities so they can progress to higher skilled positions. By boosting the wages of lousy jobs, they do just the opposite: Give uneducated workers artificial incentives to remain in what are essentially entry-level jobs. There is something downright un-American about that.

Bonnie Erbe, host of the PBS program "To the Contrary," writes this column weekly for Scripps Howard News Service. Her E-mail address is bonnieerbe@CompuServe.com