Contrary to what critics have feared, requiring companies that do business with government to pay a "living wage" does not generally result in increased costs, according to a new study.
The study, released Wednesday by the Brennan Center for Justice at the New York University's School of Law, surveyed 20 cities and counties across the country to assess the impact of their year-old "living wages" laws.
Utah law prohibits forcing local governments to pay wages above poverty level.
While living wage laws have a variety of different components, the key requirement is that employers who expect to do business with government pay their workers between $8 and $12 an hour, a salary that can help stave off poverty and government assistance.
Generally, the study determined that contract costs were much less than government officials had feared, for a couple of reasons.
First, most governments don't have a lot of contracts with companies who employ low-wage workers, with the exception of janitorial service providers or security guard firms.
Second, many governments found the requirement actually stimulated more interest in bidding on the contract, with companies in many circumstances absorbing the increased costs of the labor rather than passing them onto government.
Bill Tibbetts, Anti-Hunger Action Committee coordinator for Salt Lake's Crossroads Urban Center, said the study reflects why Utah lawmakers were wrong nearly three years ago when they passed legislation prohibiting living-wage laws.
"Generally, this study shows these laws don't cost cities very much at all," Tibbetts said. "What that means to me is that a living wage law is is one of the more cost-effective anti-poverty measures a city could take."
Tibbetts said the premise behind living-wage laws is that it makes little sense for one branch of government, such as a city, to perpetuate poverty by doing business with employers that don't pay workers enough to get off assistance provided by another branch of government.
A 2002 study, for example, showed nearly half of all Utah jobs do not pay a high enough wage to meet the federal government's poverty threshold of $17,650 for a family of four.
Typically, Tibbetts said, Utah workers make 80 percent of the national average wage but endure 100 percent of the nation's average living expenses.
"I work every day with people who are unable to feed their family even when they are working full time," he said.
The current federal minimum wage of $5.15 an hour is woefully inadequate, Tibbetts said.
"If someone were to work two 40-hour-a-week minimum-wage jobs with three children to support, that person would still qualify for food stamps, which means another branch of government has determined they are incapable of feeding their family," Tibbetts said. "That sort of tells you how inadequate the minimum wage is."
Although the study found cities and counties generally experienced an increase in contract costs of less than 0.1 percent of their overall budget, Sen. Howard Stephenson, R-Draper, said living wage laws pose a financial nightmare.
For that reason and others, he spurred passage of legislation in 2001 that prohibits local governments from enacting living wage laws.
"What we should not have is a crazy patch quilt of different standards of minimum wages from community to community that can produce pay inequities for people who do the same work within the same company," Stephenson said.
Living wage laws, he added, are an "artificial" and unnecessary solution.
"It is not possible to fool the economy. We can place all kinds of artificial supports for wages in place, but there is a price that has to be paid when we try to circumvent the marketplace and what the marketplace will pay. . . . The best anti-poverty program I have ever seen is a good economy."
Although Salt Lake Mayor Rocky Anderson has said he wants to sign an executive order that merely "encourages" the city to give preference to employers who pay living wages, the effort has been slowed due to legal wrangling.
A coalition of more than 20 different organizations called Utah Jobs for Justice is continuing to press for an encouragement of the practice on a local level.
E-mail: amyjoi@desnews.com