Another week passes, and another vapid, unthinking ordinance begins snaking its way through the city council.
This round, it’s a “living wage” ordinance recently introduced by Councilman Jared Brossett. At a legislative breakfast held earlier this month, Brossett depicted the law as a palliative for New Orleans’ notorious and persistent epidemic of poverty.
“Income inequality — I don’t need to tell y’all this. It’s vast. I mean, we were compared to Zambia, as far as income inequality,” Brossett said. “That is ridiculous, as we are part of one of the richest and strongest nations on this planet.”
Brossett’s proposed ordinance is actually modest in scope. It would require any employer with more than $25,000 in city contracts or receiving more than $100,000 in city grants to pay a minimum of $10.10 per hour and provide at least 7 paid sick days per year.
Hence, New Orleans is hardly in danger of becoming a bastion of socialist labor policy. Sweden won’t be taking cues from Brossett anytime soon.
Moreover, because the ordinance only affects employers that accept grants or enter into contracts with the city, it at least arguably would not violate La. Rev. Stat. 23:642, which prohibits political subdivisions from setting “a mandatory, minimum number of vacation or sick leave days . . . or a minimum wage rate which a private employer would be required to pay or grant employees.”
That statute was passed in response to a previous effort by the City of New Orleans to enforce a living wage ordinance for all employers. The Louisiana Supreme Court struck the prior ordinance in 2002.
With previous efforts to set a citywide minimum wage having failed, it’s understandable that eventually the issue would come back before the council in a different form boasting plausible legality. The City of New Orleans has never been pleased with the prospect of being overridden by those Nosey-Nellies in Baton Rouge.
However, it’s far from clear that this more limited proposal for a living wage is anything other than a symbolic gesture. Even if living wage laws do have an impact, it’s unclear whether that impact is positive or significant.
In 2013, National Public Radio interviewed David Neumark, an economics professor at the University of California, Irvine, on the subject of local living wage laws. Neumark noted that living wage laws started catching on in the late 1990’s and have now expanded to a “very large share of the country’s large cities.”
Neumark is somewhat ambivalent about the impact of these laws. “A lot of people are making higher wages, and a much smaller number have perhaps lost their job or lost the opportunity to find a new job,” Neumark told NPR. “So there’s winners and losers.”
“[F]or the most part, I think, what these laws are doing, they’re kind of redistributing money among low-income families – that is, some are better off, some are worse off, and the net effect is pretty minor.”
Neumark’s lukewarm appraisal makes living wages laws sound like little more than posturing. Living wage ordinances are pitched as a means to lift people out of poverty, when it fact they improve the lot of some low-income workers while hurting others. I’m not convinced that we should be passing laws that leave any proportion of the poor in an even worse position.
Additionally, the impact can’t be positive on the city’s budget. A law that limits competitive bidding to firms that agree to artificially inflate their labor costs will, on balance, increase the costs of city contracts. The impact is likely minor, but still real.
Set against this backdrop, Brossett seems to simply be indulging a trend.
“Many living wage ordinances exist throughout the country in other cities, so why can’t it in New Orleans?” Brossett asked rhetorically.
The answer is that New Orleans needs to carefully consider how to proceed, as opposed to simply jumping on the bandwagon. Just because all the other cities are pandering with living wage laws doesn’t mean we have to do so too. Surely, those after-school specials about peer-pressure have at least taught us that.
Making a dent in entrenched poverty in New Orleans won’t be achieved by making certain classes of employers pay slightly higher wages. It’s going to require a host of reforms: a better business regulatory environment, the repeal of laws and policies that increase cost-of-living, and a commitment to improving public infrastructure and services.
Of course, it’s always easier to just pass a law saying that jobs must pay well. It’s much harder to engender an atmosphere where employers offer those jobs regardless, where there is genuine economic health.
That’s the difference between superficial and substantive reform.
Owen Courrèges, a New Orleans attorney and resident of the Garden District, offers his opinions for UptownMessenger.com on Mondays. He has previously written for the Reason Public Policy Foundation.