From paying a living wage to earning paid sick days – quality increases offset higher costs
Five years ago, San Diego’s City Council passed an ordinance requiring contractors to pay a living wage to their workers. A study released last month shows mostly positive effects for both employers and employees.
Prior to the ordinance’s passage, only a small percentage of contractors paid what could be considered a living wage – and the majority of those paid it were performing highly-skilled work such as accounting and technology services. At the time the law was passed, the minimum wage in San Diego was just $6.75/hour – just $14,040 per year. Now, contractors are paying $11/hour, plus $2.20 if the employer provides health benefits. If they don’t, the wage is boosted to $13.20/hour, or $27,456 per year.
Opponents predicted the requirement would be a “colossal mistake” with “dire implications”, costing both employers and city tax payers far too much. In fact, a City Hall survey from March 2010 showed that the cost of the ordinance has been relatively low for the city and that a number of contractors have reported benefits from the higher wage. Since the law has gone into effect, nearly 50% of contractors have reported increases in quality along with decreases in absenteeism and employee turnover.
A living wage requirement lifts people working full time out of poverty, and makes long-term financial sense. In San Diego, just as in any city, a living wage allows workers to live and work in the same city, supporting local businesses by driving their wages right back into the local economy.
Providing paid sick leave gives a similar boost to productivity by reducing absenteeism and turnover. Just like a living wage, allowing workers to earn a minimum number of paid sick days will help keep Tacoma’s businesses profitable and strengthen our families’ economic security. Learn more