City can’t afford the living wage

We believe the City Council should dismiss this proposal. The idea did not make fiscal sense when it was first proposed three years ago, and it certainly does not now, with the city facing an estimated $50 million deficit for fiscal year 2004.

It is no understatement to suggest that Providence is in the midst of a financial crisis. Among the capital city’s fiscal challenges are a $526 million unfunded pension liability and a series of long-term union contracts that include fixed increases in compensation and the cost of health benefits for city employees.

Providence Mayor David N. Cicilline must find ways to drastically cut costs. A living wage would not only cost the city money, it would be more likely to cause area employers to reduce the number of people they employ, or possibly cause them to abandon doing business with the city.

This latest proposal by living wage proponents is a watered down version of one that has been presented several times during the past few years.

Proponents of the living wage initially presented a plan that would have mandated that city workers be paid $12.30 per hour with health insurance. Businesses that do business with the city would also be included in the proposal.

Now, the proposal calls for a $10.19 per hour rate and a reduction in the health insurance payment. The hourly pay would increase annually, as it would be tied to a federal poverty index.

The living wage proposal has the support of community organizations, labor unions and church groups.

The business community, particularly the Greater Providence Chamber of Commerce and a contingent of area small business owners vehemently oppose it.

Proponents of the measure argue that it is a step towards independence – a step away from the welfare rolls.

But we firmly believe that it would ultimately hurt most deeply the very people it is intended to help. A living wage would do more harm than good. We remain convinced that it would harm the businesses that employ the very people the proposal aims to benefit.

The living wage proposal has new life in part because the Providence City Council has at least two new members who support the idea.

They and others who support this idea should remember that while the Providence City Council may have the authority to enact a wage requirement for city employees and employees of city vendors, it does not have the authority to mandate that private businesses employ or retain a set number of workers.

Small businesses have options if they are mandated to pay a living wage. They can reduce their payroll by firing workers. They can cease doing business with the city. Or they can pass on the cost of doing business to the taxpayers of Providence.