The City Council’s economic development committee advanced an ordinance on Thursday to force city contractors and recipients of city grants or other financial assistance to pay their workers $15 an hour by 2023. The ordinance still needs to be approved by the full council, but all seven council members signed on as co-authors, giving it a clear runway to passage. That vote is expected to happen on Thursday, July 1.
The city’s existing Living Wage Ordinance, passed in 2015, required city contractors to pay workers to pay $10.55 per hour when it took effect in 2016. That has since been adjusted to $11.19 per hour, according to the city’s website. Thursday’s ordinance would amend that law.
“We all know that the costs of living in New Orleans and across the state are growing exponentially,” said Councilman Jared Brossett, who originally proposed the 2015 ordinance. “Living costs go up, and wages stay stagnant.”
The new mandated wage would not apply to direct city employees, who are paid as little as $11.21 an hour, according to The Times-Picayune/New Orleans Advocate.
Pay changes for most city workers need to be approved by the city’s Civil Service Commission, an independent board that approves city personnel policies and sets its pay plan. The City Council can’t mandate pay changes for those workers on its own. But multiple council members said they were working on a motion or resolution urging the Civil Service Commission to create a $15 minimum wage for city workers as well. Any motion or resolution from the council, however, wouldn’t be binding.
“We gotta lead by example,” said Councilwoman Cyndi Nguyen. “If we want to take this fight to the private sector, we need to lead by example.”
Council members and advocates said that after raising wages for city workers, the goal would then be to raise the minimum wage for all privately employed workers in Orleans Parish. But the City Council doesn’t have direct control over that either.
Louisiana, unlike some other states, doesn’t allow local governments to set minimum wages on their own — through a type of law sometimes referred to as state preemption. Since Louisiana doesn’t have a state minimum wage, the minimum wage in New Orleans is currently set at the federal minimum — $7.25 an hour.
To raise the minimum wage for all employees who work in New Orleans, the state would either have to lift the preemption law or set a state-wide minimum wage of its own.
But the law doesn’t preempt the city from setting minimum wages for its own employees or contractors. The city passed a Living Wage Ordinance in 2015 requiring all city contractors with contracts over $25,000 a year, as well as organizations that receive more than $100,000 in municipal financial assistance — such as grants or city tax incentives — in a year, to pay their employees at least $10.55 an hour. The law requires the city to increase that wage every year to match inflation, rising up to the current rate of $11.19.
The ordinance considered on Thursday would increase the rate to $13.25 an hour starting in 2022 and $15 an hour starting in 2023. Every year after that, the wage would be raised to adjust for inflation.
A large group of supporters from a number of organizations — including Step Up Louisiana, the City Waste Union and the AFL-CIO — applauded the move. But many speakers, as well as some council members, stressed that it was only a first step and more steps were needed to make New Orleans a livable city for working-class people.
Advocates argued that $15 an hour isn’t all that much money.
“No one is getting rich off this,” said Erika Zucker, Policy Advocate with the Workplace Justice Project at the Loyola Law Clinic
A $15 an hour wage for a full-time, 40 hour a week worker comes out to $31,200 a year before taxes, assuming the employee doesn’t need to take unpaid time off. The current living wage of $11.19 would provide that same worker $23,275 a year before taxes.
“We’re still not where we need to be in my opinion but it’s a great step,” said Chip Fleetwood, Secretary-Treasurer of the Greater New Orleans AFL-CIO Central Labor Council.
Ben Zucker, co-founder and director of Step Up Louisiana, pointed to a study from the Economic Policy Institute to push back on the misconception that minimum wage workers are mostly teenagers in temporary jobs.
“Minimum wage workers aren’t children,” Zucker said. “Minimum wage workers are adults with children of their own.”
As with many city laws, the effectiveness of the living wage requirement comes down to enforcement. And there have been issues enforcing the living wage ordinance even at its current, lower rate. In 2020, the ordinance came under scrutiny when garbage truck hoppers working for city contractors went on strike, saying they were only being paid $10.25 an hour — under the living wage requirement at the time.
Partly in response to that strike, the City Council passed an ordinance in July 2020 that added new enforcement and monitoring requirements for the city’s Chief Administrative Office. That office was already responsible for enforcing the Living Wage Ordinance. But the ordinance added the requirement that the Chief Administrative Officer — currently Gilbert Montaño — publish an annual report on its enforcement efforts.
That report is supposed to contain every city contract or financial assistance agreement that is applicable to the law. And for each of those companies, the report is supposed to include the wage of the company’s lowest paid worker.
That reporting requirement kicks in this year. According to Zucker’s presentation, the CAO’s office has identified over 2,000 contracts that are covered by the Living Wage Ordinance. The list will be presented during budget hearings in the fall, according to Zucker’s presentation.