The Common Good
January-February 2001

Bosses for a Living Wage

by Holly Lebowitz Rossi | January-February 2001

While initially costing a company more in wages, a living wage stimulates an "upward spiral" of indirect benefits to the company.

Business Leaders for a Living Wage" is a project of Responsible Wealth that has attracted 115 business owners and investors to sign a "living wage covenant" that "no one working full time should live in poverty."

Responsible Wealth recommends a wage floor of $8.20 per hour, which would allow a family of four to live at the federal poverty level. Federal minimum wage is $5.15 an hour, which puts a family well below poverty level. Some communities, according to Responsible Wealth's living wage coordinator Karen Kraut, choose to pledge an even higher wage than Responsible Wealth recommends, such as a $9 floor that was recently adopted in San Francisco.

Urging a business to pay a living wage is not only an ethical appeal to do the right thing, Kraut says, it's a business-conscious calculation: While initially costing a company more in wages, it stimulates an "upward spiral" of indirect benefits to the efficiency and productivity of the company.

"There are a number of business benefits," said Kraut, including a reduction in absenteeism and employee turnover, and an increase in morale, motivation, and productivity. The fact that the lower-wage employees who would benefit from a living wage standard are most likely to spend their money in the local community helps local businesses and continues to boost the economy.

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