A Living Wage: It’s the Law!

Originally published in New Ground 60, July — August, 1998.

by Bob Roman

Everyone reasonably hip knew that something was going to happen on July 30. If nothing else, Thursday was to be the day the Chicago City Council finally pulled the plug on the proposed Jobs and Living Wage Ordinance. Despite the fact this would provide the New Party a most excellent issue with which to portray most of Chicago’s aldermen as self-serving hacks (“Pay back time in 99!”), supporters of the Ordinance were grim.

Still, Chicago ACORN and SEIU 880 turned out their company of shock troops for a noisy demonstration commenting on the obvious incongruity of the Council voting itself a pay raise while many of the people supplying the goods and services for the operation of city government worked for less than a living wage.

Imagine their astonishment when the hither to recalcitrant City Council passed a Jobs and Living Wage Ordinance by 49-0!

When Keith Kelleher, SEIU 880’s head organizer and a leader in the Living Wage Campaign, received the call from the Ordinance’s City Council supporters asking if the Campaign would accept the deal, he described his reaction:

“I’m like Jackie Gleason on the Honeymooners when he’s speechless: ‘hominna, hominna, hominna, hominna.’. But I recovered quickly enough to say Yes, take the deal!”

Truly, there were rumbas and grins across the city, in offices, in homes, in cars. One activist supporter of the Ordinance described how, for safety’s sake, she had to pull off the expressway when she heard the news on her car phone.

Even the aldermen were grinning. They had just raised their yearly salary to $85,000 (not bad for part time work) and given Mayor Daley a boost to $192,100.

Not Ready for Prime Time Machiavelli

Most accounts give credit for passage of the Ordinance to Alderman Ed Burke. Alderman Burke, some may remember, was a dangerous, creative and marvelously half-assed opponent of Mayor Washington during the “Council Wars” of Washington’s first term.

Typically Burke was the occasion when he unearthed the tidbit that Mayor Washington had failed to file the financial disclosure statement required of all Illinois politicians. The press geared up for a feeding frenzy, but Alderman Burke had not done his homework. Something close to half the state’s politicians had similarly failed to file. Amid a chorus of embarrassed grins, the story evaporated while a silent river of paper flowed toward Springfield.

Ironically, Alderman Burke was an early supporter of the Jobs and Living Wage Ordinance. When push came to shove, he had already abandoned ship (see New Ground #54, September – October, 1997). No one was surprised. Everyone was a little relieved.

Not surprisingly, the Jobs and Living Wage Ordinance passed by the City Council is a very different animal from the original. The new Ordinance is also not a well crafted piece of work, as one might expect from someone who has not done all his homework.

Victory, Fig Leaf, or Clay Pigeon?

While aspects of The original Ordinance may have been open to question, it was a well thought out piece of work. For a complete analysis, see New Ground #49, November – December, 1996, but the outlines are simple enough. First, the Ordinance was not a minimum wage, but it did require employers of a certain size, receiving benefits from or having contracts with the City beyond a certain amount to pay a living wage of $7.60. This was to be adjusted yearly for inflation, whether the Council would or no. The Ordinance mandated the collection of data so its effects and compliance could be judged. While it set up a civic committee to monitor the workings of the Ordinance, the documents were to be public so outside groups could perform their own assessment. Finally, the benefits of the Ordinance were to be directed toward Chicago residents through the creation of community based hiring halls.

Most of this is gone (see sidebar). The new Ordinance only applies to contracts that require the employment of 25 or more employees in a specified list of job categories in the performance of that contract. Not for profit corporations are excluded. There is next to no enforcement mechanism mandated, no way of monitoring compliance with the Ordinance, and while the Council is clearly expected to adjust the base wage for inflation, there is no requirement that it do so.

Is this but a fig leaf for the City Council’s pay raise? Not necessarily: the Ordinance often says less than it means to, sometimes to our advantage. Just one example: “not for profit” is defined with reference to Illinois corporate law and to the U.S. Internal Revenue Code, specifically Section 501(c)(3). However, this is but one section of the Code that applies to “not for profit” entities and not all ‘”not for profit” corporations that operate in Illinois are incorporated in Illinois.

Some of the lack of enforcement and monitoring could be remedied by the regulations implementing the Ordinance. The Purchasing Department is mandated to “promulgate” such regulations. The Jobs and Living Wage Campaign and the Chicago Federation of Labor plan to meet with the Purchasing Department to discuss this very issue.

So the effect of the Ordinance will depend on its interpretation and its implementation. The City estimates some 600 people will be covered; the Living Wage Campaign estimates 3,000 to 5,000 will be covered.

And this is important, not just for the workers that may or may not be covered but for its political implications. While unionized workers consistently get more than their non-unionized counterparts, that doesn’t always mean they get much, particularly in many of the job categories specified in the Ordinance. A Living Wage pay increase on top of a hard fought collective bargaining agreement is a free lunch for union staff and bound to move the New Party from the realm of interesting abstraction to something that actually registers on Chicago labor’s political radar.

Is this a victory? The fight is still in progress.

And it could end up a clay pigeon. The chamber of commerce types who opposed the original Ordinance did so as if it were a minimum wage bill. With the original Ordinance, they at least had the excuse of a novel interpretation that a city business license could be construed as a “benefit” thus requiring the Living Wage. Such a far fetched idea is no longer tenable, but their arguments remain the same. Clearly, the very idea of a living wage raises the class warfare instincts of the business class.

Given the shoddy construction of the Ordinance, one could easily imagine a challenge to some specific portion of it. Unlike the original Ordinance, there is no severability clause: those clever little legal circuit breakers that say if one part of a law is found unconstitutional, the rest of it is still okay. If one part of this Ordinance is defective, the whole thing goes down. Will there be a challenge? One can’t imagine the business class objecting to a fig leaf.

Living Wage Fever

Cook County President John Stroger, Jr., may be one of the more underestimated politicians in Chicago. When the Living Wage Campaign first began in Chicago, then County Commissioner Danny Davis introduced a Living Wage Ordinance in the Cook County Board. In negotiations with the Living Wage Campaign, President Stroger indicated he was not interested in the measure and the Ordinance was going no further than the Finance Committee to which it had been referred. Within weeks of the passage of the Chicago’s ordinance, all this had changed. A new county Ordinance was introduced and referred to the Finance Committee on September 1st. Clearly, this is a man with a sensitive sense of the bandwagon.

Co-sponsored by John Stroger, John P. Daley (another son of Daley the Elder) and Roberto Maldonado, the county Ordinance is closely patterned after the city Ordinance, but better written, modified for specific county considerations, and in some ways much more limited. Indeed, preliminary estimates from the County Purchasing Agent indicated that the Ordinance would cost the county an additional $600,000 and cover a few hundred employees.

For one thing, the Ordinance apparently excludes workers covered by collective bargaining contracts (see Section 2 (B)). While the County Board’s Finance Committee considered the matter, Republican members could not credit the idea of a union contract that paid less than $7.60 an hour. Still, the language in that section was peculiar enough so that it was amended slightly to read “recognized union” rather than “responsible”. The meaning of “in no way influenced or controlled by the County of Cook” remains a mystery, but the ghost of Sam Gompers smiled and lit a cigar.

Another problem in comparison with the Chicago Ordinance is that the county Ordinance makes no provision for adjusting the living wage.

The Chicago Jobs and Living Wage Campaign attempted to remedy these and other deficiencies, including the fact that, while the original Ordinance had been imprisoned in committee, inflation had raised the estimate of a Living Wage to $7.91 an hour. The Campaign drew upon the experience of Living Wage Ordinances elsewhere in the country to suggest language that would address these concerns.

The Finance Committee meeting to consider the Ordinance was held Monday, September 14. It was a relaxed, working meeting, with the Commissioners variously dressed more for demands of the rest of the day than that meeting.

Commissioner Maldonado attempted to address the limited scope of the Ordinance by introducing, in the Finance Committee, an amendment that would have made eligible all businesses that employ 25 or more full time employees rather than those awarded a contract requiring the employment of 25 or more full time employees.

The amendment ran into a solid wall of opposition from President Stroger. “Come on, Roberto,” he complained. “We want to get this thing passed.” A representative from the Attorney General’s Office chimed to opine that Maldonado’s proposed language was more restrictive. Maldonado withdrew the amendment.

But that wasn’t the end of the story. Commissioner Jerry “The Iceman” Butler observed that if he were an employer unwilling to pay a living wage, he’d never be found with more than 24 full time employees. There was a moment of “Well… duh!” consternation among the Committee members, then Butler moved to strike all reference to 25 employees. Surprisingly, the amendment was approved.

Without a written text, I’m not sure whether Butler’s amendment applies to both Section 1 (A) 1 and Section 1 (A) 3 or just to Section 1 (A) 3. Either would be an improvement, but the former would be an improvement indeed.

The Ordinance was taken up by the full Board at its regular meeting the next day, Tuesday, September 15. The day started with an ebullient press conference where all the principle players were well represented. The participants crowded into the Board chambers, ready to serve as a cheering section. Instead, the County Board plowed through a full two hour agenda before it came to the Living Wage.

Almost no one was left to witness the passage of the Ordinance. Finance Committee Chair John Daley moved the passage of items y through z on the agenda. The ayes had it with no dissent. As the decimated audience sat in stunned boredom, Stroger looked up and remarked casually, “That was yours, ACORN.”

And so it was.

Chicago Jobs and Living Wage Ordinance

Note: two “whereas” paragraphs refering to Chicago’s home rule powers precede the Ordinance.

 

Section 1. That Chapter 2-92 of the Municipal Code is hereby amended by inserting a new section 2-92-610 as follows:

 

2-92-610 Contracts requiring a Base Wage.

 

A. Definitions. For the purpose of this section only, the following terms shall have the following meanings:

 

1. “Contract” means any written agreement whereby the City is committed to expend or does expend funds in connection with any contract or subcontract which requires in the performance thereof the employment of twenty-five or more full time in-City: security guards, parking attendants, day laborers, home and health care workers, cashiers, elevator operators, custodial workers and clerical workers except the term “contract” shall not include contracts with not-for-profit organizations.

 

2. “Contracting Agency” means the City of Chicago or any agency thereof.

 

3. “Eligible Contractors” means any person awarded by the City of Chicago or agency thereof for which requires in the performance thereof the employment of twenty-five or more full time non-city security guards, the employment of non-city employed parking attendants, the employment of non-city employed day laborers, the employment of non-city employed home and health care workers, the employment of non-city employed elevator operators, the employment of non-city employed clerical workers.

 

4. “Not-for-profit organization” means a corporation having tax exempt status under Section 501(c)3 of the United States Internal Revenue Code and recognized under Illinois State not-for-profit law.

 

5. “Base wage” means no less than $7.60 per hour may be upwardly adjusted each year upon order of the City Council.

 

B. Every contract of every-eligible contract [sic] shall contain a provision or provisions stipulating the wages required to be paid to the employees listed under Paragraph A(1), and each such contract shall further contain provisions obligating the contractor or subcontractor of such contractor to pay its employees on work thereunder not less than the Base Wage.

 

C. The purchasing agent may promulgate administrative rules and regulations to implement this Section 2-92-610.

 

D. Whenever the purchasing agent has reason to believe that any such employee has been paid less than the Base rate of Wages, or upon a verified complaint in writing from an employee worker affected by the provisions of this Section, the Purchasing Agent shall conduct an investigation to determine the facts relating thereto.

 

E. Any contract that violates the provisions contained in this Section shall be subjected to Section 2-92-320 of the Municipal Code of the City of Chicago.

 

Section 2. Chapter 2-92-320 is hereby amended by inserting the language underscored and deleting the language bracketed as follows:

 

D. No person or business entity shall be awarded a contract or subcontract if that person or business entity;

 

(d) has violated Section 2-92-610.

 

Ineligibility under this Section shall continue for three years following such conviction or admission[.] or violation of Section 2-92-610.

 

Section 3. This ordinance shall apply to contracts advertised or if not advertised awarded on or after January 1, 1999.

 

Section 4. This ordinance shall be effective upon passage and publication.

 

Cook County Jobs and Living Wage Ordinance

Five “whereas” paragraphs amounting to a nice mini-manifesto are omitted. This text represents the Ordinance prior to amendment in the Finance Committee.

 

Section 1

That a base wage for services performed or produced shall be paid to individuals employed under contracts between the County of Cook and eligible contractors.

 

(A) Definitions For the purpose of this ordinance only, the following terms shall have the following meanings:

1. “Contract” means any written agreement requiring Board approval whereby the County is committed to expend or does expend funds in connection with any contract or subcontract which requires in the performance thereof the employment of twenty-five or more employees, except the term “contract” shall not include contracts with not-for-profit organizations, community development block grants, President’s Office of Employment Training, Sheriff’s Work Alternative Program, or Department of Correction inmates.

2. “Contracting Agency” means the County of Cook.

3. “Eligible Contractors” means any person or business entity awarded a contract by the County of Cook which requires in the performance thereof the employment of twenty-five or more full time employees.

4. “Not for Profit Organization” means a corporation having tax exempt status under Section 501(c)(3) of the United States Internal Revenue Code and recognized under Illinois State Not-for-Profit law.

5. “Base Wage” means no less than $7.60 per hours.

 

(B) Every eligible contract shall contain a provision or provisions stipulating the wages required to be paid to the employees listed under paragraph A (1), and each such contract shall further contain provisions obligating the Contractor or Subcontractor of such Contractor to pay its employees for work thereunder not less than the Base Wage.

 

(C) The Purchasing Agent shall require as part of the bidding and sole source procedure that any covered Contractor provide the County of Cook certification of its compliance with this ordinance.

 

(D) Any contract that violates the provisions contained in this ordinance shall be subject to cancellation by the Cook County Board of Commissioners.

Any Contractor disqualified from eligibility by the Cook County Board of Commissioners shall be ineligible for two years following violation of this ordinance.

 

Section 2.

(A) This ordinance shall apply to Contracts advertised for bid or if not advertised for bid, approved for sole source on or after December 1, 1998.

(B) Whenever a collective bargaining agreement is in effect between Eligible Contractors and employees who are represented by a responsible labor organization which is in no way influenced or controlled by the County of Cook, such agreement and its provisions shall be considered as conditions prevalent in that locality and therefore exempt from this ordinance.

(C) This ordinance shall not apply to any contract with the County of Cook entered into prior to the effective date of the ordinance.

(D) All resolutions or ordinances or parts thereof in conflict with the provisions of this ordinance to the extent of such conflict are hereby repealed effective upon passage of this ordinance.

Author: rmichaelroman

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