Friday, June 01, 2007

LTE: Living Wage Folly

Dear Mountain Xpress Editor,

City council wants to include employee wage levels as a factor in negotiating with contractors who bid on municipal contracts. The city would effectively deny bids if contractors were found paying their employees anything below what the Asheville-Buncombe Living Wage Campaign has determined to be a "living wage."

Living wage proponents set that minimum wage level for Asheville at about $9.50 (with benefits) to $10.86 (without benefits). This is based on a formula that assumes, 1) monthly rent costs should not exceed one-third of a person's income, and, 2) that the fair market value for a one-bedroom apartment in the Asheville Metropolitan Statistical Area (which includes portions of Buncombe, Haywood, Henderson and Madison counties) is $534 a month.

In other words, a person's wage should be set at a level that enables that person to comfortably afford a typical apartment in Asheville; among other things that a person might claim to need. That is, employers, under this scheme, should first calculate what their employees need and then adjust their payroll budgets accordingly. But wages should be based on the value of a person's labor to his employer and not based on that person's need to buy stuff. Employees should be paid what they're worth and should have no moral claim on an employer’s presumed duty to make their lives comfortable.

Also, a Chamber of Commerce survey of organizations that contract with the city has revealed that some companies will simply not bid on municipal contracts if the living wage ordinance is passed. This ordinance did pass. And we will have to wonder where those non-living wage employees will be working this summer. Perhaps they could apply for a job with the city, which, happily, already pays living wages to its employees out of the city's taxpayer-funded coffers.

And here is the final absurdity: With the so-called "living wage" initiative, the government is actually putting into practice precisely what has only been alleged of the oil industry; namely, colluding to artificially raise the price of a commodity above market levels; in this case, the price of labor. The government should not be in the business of setting prices for labor -- or for anything else for that matter.