The goal sounds enticingly simple: let’s help alleviate poverty in Milwaukee County by requiring any business under contract with the county to pay a higher “living wage.” If a business wants to do business with the County, make sure they are paying good, family-supporting wages to their workers.
Sounds great. Sounds simple. Sounds fair.
Only one problem with this great sound bite solution: It doesn’t work in the real world.
As the Milwaukee County Board prepares to take up another wage mandate bill, they should bear in mind real impacts, on real jobs, in the real competitive economy in which we live.
No one knows better than employers how important it is to attract and retain quality workers and the role competitive compensation levels play in getting and keeping good employees. Any employer who overlooks this area of her business isn’t going to be in business for long.
Similarly, however, no employer can afford to overlook other factors of the competitive marketplace in which they operate – and one of those factors is cost of doing business. Any region that makes themselves a high-cost island for business will lose ground in terms of jobs, opportunity and growth.
That is the marketplace reality Milwaukee County needs to bear in mind when considering a living wage mandate. If wage mandates drive costs up for companies operating in or with Milwaukee County, many of those companies will simply take their business elsewhere, be it across the street, across the border, or across the globe.
We saw this dynamic in action recently when Hotel Specialties Inc. nearly walked away from an $8 million hotel project in Wauwatosa’s Innovation Park because of wage mandates Milwaukee County wanted to place on the project. Fortunately, the County reconsidered, removed the mandate and the Innovation Park project is back on track.
Under any new, sweeping county living wage mandate, however, we will see this kind of drama played out over and over again as businesses decide it just does not make economic sense to do business here.
Make no mistake, a wage mandate will drive certain jobs out of existence in Milwaukee County. That would be a tragedy for the County, but it would be an even greater tragedy for the very workers the “living wage” mandate is purported to benefit. When living wage rhetoric meets reality, we are confronted with the fact that a real job at $9 an hour is better than a hypothetical $11 an hour job that doesn’t exist because the market will not bear it.
You can’t feed your family with a sound bite. If Milwaukee County is serious about creating jobs and helping workers, it will reject mandates that sound good but in practice isolate the county as a high-cost island and ultimately result in less growth and fewer jobs for our community.
Steve Baas is the vice president of government affairs at the Metropolitan Milwaukee Association of Commerce.