The St. Petersburg City Council recently passed an ordinance that requires many companies doing business with the city to pay their employees a living wage.
WMNF News interviewed Charlie Gerdes, one member of the St. Petersburg City Council who voted for the living wage ordinance.
“We passed an ordinance that requires any contractor or vendor to use our contract management solution that’s doing business with the City of St. Petersburg. That ordinance also has an annual escalation provision, so that next year it will go to $13/hour and the year after that it will go to $14/hour and ultimately it will reach $15/hour. It’s a graduated escalation to $15/hour over a 3-year period. Any contract that you receive from the City of St. Petersburg, in excess of $500,000, you’re required to comply with this ordinance. We also provide that if you are already giving your employees health insurance or other benefits (dental, vision), those costs can be included in the calculation of the wage. We passed that and it will become effective, I think, January 1st.”
If the costs for the employees of these contractors goes up, it’s possible that the costs that the city will pay to the contractors will have to go up as well. Why do you think that that’s worth the trade off?
“Because the cost of poverty is so much more to our community than the cost of raising these wages. I believe the calculation was that the expectation was in the first year this would likely cost the city in the neighborhood of $350,000 in increased contract costs, but, that really is a small number when you compare it to the cost of poverty, crime, bad healthcare, educational deficiencies, the kinds of things that poverty places obstacles in peoples’ lives. In addition to that it’s pretty proven out there that when you increase wages you should expect a 1.4-2.0 (times) return on the increased wages in your local economy. So, that basically zeroes out the additional cost and eliminating or starting to chip away at least, at the tremendous bad effects from poverty is a real benefit to the entire community.”
Groups like the Associated Builders and Contractors for the Florida Gulf Coast and The St. Petersburg Area Chamber of Commerce, they oppose this and they say things like, ‘that there will be unintended consequences’, but, the City Council, by voting for the ordinance said ‘it’s going to disregard those warnings, I guess, from those groups’`.
“Yeah. I think ‘disregard’ is a strong word. I think we listened and I think we concluded that any consequences, in terms of increased costs, in terms of maybe some contractors choosing not to submit bids because they don’t want to pay their employees that much, we concluded that those consequences did not overtake the benefits of reducing poverty in our city.
“I’ll give you one example: in preparation for this ordinance, I tried to do some research – like I always do my homework on anything – about this $15 living wage thing. One of the criticisms is, it’s not $15 everywhere. Depending upon where you live, the living wage may be something less that $15/hour. I looked into that and in fact, MIT (Massachusetts Institute of Technology) publishes an annual cost of living index for all of census tracks across the United States and in Pinellas County, they identified a living wage as $11.99/hour for a single adult. So, that’s right at $12/hour. I think the critics would say then, ‘Well, next year it goes to $13/hour and the year after that it goes to $14/hour.’ The interesting thing to me was, if you are an adult with 1 child, the living wage in Pinellas County, Florida, is $24/hour. That statistic made it apparent to me that it’s really the children who suffer from poverty and from low wages. What’s happening is school readiness is affected, health outcomes are affected; school readiness problems turn in to criminal problems. So, what we concluded was that all of those disadvantages that were brought to the table by the builders and the Chamber were outweighed by our fight against poverty.”
And finally, Charlie Gerdes, St. Pete City Council member, what’s next? Is there anything else that your group will be doing to increase wages in St. Petersburg?
“I don’t know about increasing wages. I don’t think there’s anything additional on the radar right now, in terms of wage issues, but, we continue to try and make the community redevelopment area in South St. Petersburg a priority, in terms of making sure that wherever we’re spending money, in that area, that we’re getting results and benefits and that we’re eliminating poverty.
“You know, it came out during the last mayoral campaign that in fact, poverty right now, in South St. Petersburg is at the lowest it’s ever been recorded. So, we believe that we’re making progress in beating down the poverty rate and lifting up the quality of life for the residents in that area that has historically been marginalized and disadvantaged. We’re going to continue to do everything that we can to keep that momentum going, but, it’s gonna include a lot more things than just wages.”