City of Ann Arbor Living Wage Amendment

Official Policy
January 13, 2000

The Ann Arbor Area Chamber of Commerce urges a no vote on the proposed “Living Wage” amendment to the city code. The Living Wage ordinance is not an efficient or effective tool for this community. Based on information from other communities, very few workers will have their wages increased under this ordinance, but both the city taxpayers and the affected businesses will pay more to set up a bureaucratic compliance program. Instead these funds should be used to provide education and other programs for worker self advancement. The Chamber presented a series of questions to City Council asking for specific answers about the population to be assisted by the Living Wage and the impact of the mandated wage on the business community. We have not received a response. 

The Living Wage ordinance will cost businesses and non-profits time and money to document and manage the records needed to establish compliance. Some of the not-for-profit organizations will incur expenses to establish their need for an exemption. The ordinance will also encourage elimination of certain entry-level positions and will likely decrease competitive bidding for city contracts. It will be an additional expense to the city to administer and enforce the program. This reduces or diverts funds that could be directed toward improvements for lower income workers.

The ordinance does not raise the overall skill level of the workforce in our city. Education and training are better alternatives. Education provides the foundation for improving the quality of life for everyone and develops a more knowledgeable worker. Additional training will improve skills, increase productivity, and create a talented employee pool. Mentoring programs for entry-level employees can help them gain experience to move to better paying positions. At the state level, earned income tax credits can be used to directly benefit the worker. 

We urge the city to work with existing public and private organizations to establish educational, mentoring and other programs that will effectively assist workers without creating a costly, ineffective bureaucratic restraint on businesses and non-profits. Ann Arbor should not adopt a Living Wage ordinance.