Wage Deflation

info@reason.com (Jonathan Block) — Wed, 01 Dec 1999 00:00:00 EST

Over the past few years, "living wage" ordinances have gained popularity throughout the country. Such laws require businesses that have public-sector contracts or that receive economic development incentives to pay workers several dollars above the minimum wage. They are in place in at least 37 jurisdictions and have been proposed in about 70 more.

But the recent defeat of a living-wage law in Montgomery Country, Maryland, just outside of Washington, D.C., suggests that when the negative economic effects of such legislation are made clear, even politicians quick to score p.r. points can do the right thing. In June, developers who had received a tax abatement to redevelop downtown Silver Spring went ahead with their $325 million project only after receiving assurances from the county council that a proposed living wage bill would not affect them.

Montgomery County Executive Douglas M. Duncan led the fight against the proposal, worrying that the law would make it too expensive for firms to do business in the county or that they would simply tack the higher labor costs onto their bids, effectively getting the county to pay the increase. When the living wage proposal came up for a vote in July, a majority of the nine-member council voted it down.

Those voting against the bill included Steven A. Silverman, an at-large Democratic member of the county council, who had signed campaign pledges in favor of a living wage ordinance. Explaining his switch to The Washington Post, Silverman said, "When I signed on to this, I was under the impression that the costs would fall on the private sector."

Boxed In

info@reason.com (Jonathan Block) — Fri, 01 Oct 1999 00:00:00 EDT

Daniel Pink, a Washington, D.C.-based writer who works out of his home, receives his mail like millions of self-employed Americans and small-business owners: He rents a private mail box (PMB) at a local Mail Boxes Etc. Pink, the author of a forthcoming book on the rise of the independent contractor, likes the convenience of using the address of the Wisconsin Avenue store on all of his correspondence. But thanks to a new U.S. Postal Service rule, Pink will be forced to use the phrase PMB, rather than "Box," "Suite," or "#," before his box number on all correspondence starting in April 2000. That rule, he says, "symbolizes that you are not part of the legitimate economy."

Indeed, that seems to be the USPS position. Spokesman Norm Scherstrom says the policy change is necessary to protect consumers from fraud schemes that often involve private mailboxes (Scherstrom also pooh-poohs the widely held feeling that the Postal Service is trying to undercut competition for P.O. box customers). One major problem with PMBs, according to Scherstrom, is identity theft, which happens when someone obtains another person's vital information, uses the information to rent a mailbox, and then uses the address to secure credit cards.

Pink sees things differently. He claims that all PMB owners are now being treated like criminals because of the actions of "a few bad apples." He resents the expense and inconvenience of printing new stationery and the loss of a simple street address. He also sees it as an attack on new ways of making a living. Says Pink: "The USPS is a large bureaucracy imposing its will. This change delegitimizes a new way of working."

Reason Magazine - Contributors

Wage Deflation

Boxed In