A Living Wage "Model"?

How much does a person need to earn in order to make ends meet? That's the question at the heart of Jon Gertner's article. on the living wage movement in Sunday's New York Times magazine. The story looks at efforts by labor groups and grassroots organizers to get cities and states to set a localized minimum wage that exceeds (in some cases, far exceeds) the federal minimum of $5.15, which hasn't budged in about a decade.

Gertner's story seems to come out in favor of living wage legislation. For example, it points to a report by two economists who found that places that adopted a living wage ordinance did not lose jobs to nearby cities or states that had no such law, and in fact, some living-wage zones actually saw a net gain in jobs. That said, the author does a good job of representing the opposing viewpoint. He interviews business owners in Santa Fe, the city with the highest minimum wage ($9.50 an hour), who explain how an across-the-board wage hike drains their business of cash that could be invested in other meaningful ways. These entrepreneurs are not entirely persuasive, however. I got the sense that they didn't object to a higher minimum wage because they really believed it would hurt their business. Instead, they seemed demoralized and depressed, which is not generally the response that business owners have to higher costs. I suspect that the real issue here is that the business owners were deeply offended that a group of officials (the city council), who are not in the business of creating jobs themselves, had the temerity to suggest that local entrepreneurs were exploiting the very workers whose jobs they had created.

Gertner concludes the article by suggesting that Santa Fe is, rightly or wrongly, a "model" of future labor activism. That may be. It may also serve as a model of how a city can unintentially enrage and demoralize some of its most important (and surprisingly sensitive) citizens.

Mike Hofman was previously editor of Inc.com and a deputy editor at Inc. magazine, which he joined in 1996. The site was nominated for a National Magazine Award for Digital Media in 2010, and was named the best business website by Folio Magazine. In 2006, Hofman was part of a team of writers nominated for a Webby Award for best business blog. He lives in New York City.