New Party Report: Making Work Pay

Steve Macek


Like most cities around the
country, Minneapolis and St. Paul used to hand out millions
of dollars in public subsidies to local businesses with
virtually no strings attached. Companies were free to take
taxpayers’ money without hiring a single central city
resident. The jobs they generated using that money often paid
well below what it takes to keep a family out of poverty.

All that has now changed.
Thanks to a hard-fought, 18-month long campaign mounted by
the New Party, the Association of Communities Organized For
Reform Now (ACORN), and several area labor unions earlier
this year, the Twin Cities joined Baltimore, Milwaukee, New
York, and a growing list of other municipalities that require
recipients of corporate welfare to create jobs that pay a
living wage.

On January 2, the St. Paul
City Council unanimously adopted a resolution that calls for
businesses receiving more than $100,000 in city tax breaks,
grants, or other financial assistance to create or retain
jobs paying a "living wage" (defined as 110 percent
of the federal poverty line for a family of four or roughly
$8.25 an hour). It also mandates that 60 percent of new jobs
created using such aid go to St. Paul residents and that a
special effort be made to recruit low-income people for those

In March, the Minneapolis City
Council followed suit. The version of the policy they
passed–over the strenuous objections of the Greater
Minneapolis Chamber of Commerce–is even stronger than the
one in effect in St. Paul. In addition to a mandated living
wage of $8.25 for taxpayer-funded projects, the policy
prohibits contracting out current city jobs to companies that
don’t pay a living wage. It specifies that current contract
employees be brought up to a living wage. As Teamster and
living wage activist Erik Jensen observed, "This
virtually eliminates the ability of nonunion contractors to
pit their low-wage, zero-benefit workers against the
unionized city worker."

The Minneapolis resolution
also gives preference to businesses practicing
"responsible labor relations" in the awarding of
job training assistance. It develops city purchasing policies
to encourage the creation of more unionized, living wage

Dick Johnson, president of the
Minneapolis Central Labor Union, hailed the passage of the
policy as a "great victory for the city and its

"These resolutions
establish the principle that workers deserve a living
wage" said Mary Jo Maynes, chair of Progressive
Minnesota, the Twin Cities area New Party affiliate. Living
wage policies are a crucial part of the larger effort to
rebuild our central cities and create sustainable regional
economies. By improving pay for even a small segment of the
labor force, they help to raise the local wage floor. We have
been told for too long that urban communities can do nothing
about the impact of de-industrialization, rising poverty and
inner-city joblessness, that our problems are all the result
of global competition. The living wage movement has given us
and other cities new tools to work with. "

The struggle to attach wage
conditions to public subsidies in the Twin Cities began back
in the summer of 1995 when activists from ACORN and the New
Party gathered the 10,000 signatures needed to put a living
wage initiative on the ballot in St. Paul. Among other
things, the initiative would have required businesses getting
aid from the city to pay workers a wage of at least $7.21 an
hour. Denounced as "Stalinesque" and "the
mother of all job killers" by the city’s Democratic
mayor, attacked repeatedly in the editorial pages of the
daily newspaper, the measure was the focus of a relentless
corporate-financed smear campaign that ultimately outspent
supporters 10-1. The well-heeled opposition managed to scare
enough people to defeat the measure when it came up for a
vote in November.

The issue, however, refused to
die. Shortly after the St. Paul initiative lost at the polls,
Minneapolis City Council member Jim Niland convinced the city
councils of Minneapolis and St. Paul to convene a joint task
force to develop recommendations for creating more living
wage jobs in the Twin Cities. The task force included members
of the labor unions, business owners as well as a few ACORN,
and New Party members. The recommendations they ultimately
arrived at became the basis for the resolutions passed in
Minneapolis and St. Paul.

Though everyone involved in
the living wage coalition is pleased with the recent
victories, most agree that the policies, as they stand, leave
plenty of room for improvement. For instance, Minneapolis’s
policy doesn’t cover publicly-funded projects like retail
stores or sports stadiums that are currently defined as
"community development."

"The City Council should
expand this policy to cover a wider range of
businesses," said Martin Goff vice president of Hotel
Employees and Restaurant Employees (HERE) Local 17 and a
member of Progressive Minnesota’s steering committee.

"All levels of
governments should use the living wage standard as a guide
for public spending," added Maynes." If we are
going to kick more and more people off welfare, we need to
guarantee that they’ll be able to find jobs that pay enough
to keep them out of poverty."

As administrative guidelines
are developed in the months ahead, living wage supporters
hope the policies in Minneapolis and St. Paul will be
broadened to cover other kinds of taxpayer financed
development. Whatever happens, the success of their efforts
so far has already changed the tenor of local political
debate dramatically. As Maynes explained, "The living
wage campaign has raised the issue of whether or not the Twin
Cities can afford to subsidize businesses that pay so poorly
that their employees can’t make ends meet. Given our scarce
resources, shouldn’t we try to attract employers who treat
their workers with dignity and pay decent wages? It’s a
question that’s not about to go away."

Steve Macek lives in St. Paul,
MN and is a active member of Progressive Minnesota. For more
information about the New Party or about ongoing Living Wage
campaigns, contact the New Party National Office, 227 W. 40th
Street, Suite 1303, New York, NY 10018; 800-200-1294; E-Mail:;