"Economic development" is one of those nebulous, catch-all phrases that, for the next few months, we'll see kicked around in both the Missoula City Council and the Montana Capitol like a well-worn hacky sack. Its precise meaning can be deceptively simple and noncontroversial. But ask elected officials to describe the characteristics of effective economic development and how it's achieved, and you're likely to get an earful of vastly different proposals.
As someone who admittedly knows as much about economic development as about ancient Sumerian birthing rituals, I nevertheless can grasp one of its most fundamental principles: Achieving a healthy economy means promoting the growth of high-wage jobs that allow workers to afford such "luxuries" in life as food, housing, clothing, transportation, health care and personal savings, not to mention federal, state and local taxes.
Unfortunately, the prospects for a finding such jobs in Montana are growing increasingly difficult, according to a study released Wednesday in Helena by the Northwest Policy Center and the Northwest Federation of Community Organizations. "The Northwest Job Gap Study," as it's known, explores the gap between the number of living wage jobs being created in the Northwest (Montana, Idaho, Oregon and Washington) to the number of people looking for living wage jobs. A "living wage" is defined as one that "allows families to meet their basic needs without resorting to public assistance and provides them with some ability to deal with emergencies and plan ahead."
In Montana, the study calculated a living wage for a single adult with no children to be about $18,760 a year, or $9.02 an hour. For a single adult supporting two children, a living wage comes to $30,784 a year, or $14.80 an hour.
As anyone who has spent a few depressing afternoons surveying the bulletin board at the Missoula Job Service knows, ours is a predominantly service-driven economy, with wages comparable to those found in Mexican border towns, minus the allure of cheap tequila. Prospects for well-paying jobs remain low, a fact that isn't likely to change in the near future.
The Northwest Job Gap Study found that the Montana economy is simply not creating enough living wage jobs for those who need them. The study found that about 45 percent of all jobs in Montana pay less than $9.02 an hour, and nearly 73 percent pay less than $14.80 an hour.
The prospects for new job seekers are equally distressing. More than half of all job openings in Montana pay less than what a single person must earn to meet their basic needs and plan ahead, while only one in five pays enough to support a single parent with two children.
In Missoula, the city's Administra-tion and Finance Committee is in the process of drafting a policy to take on the issue of economic development that will allow the city to access some $300,000 to $400,000 annually in federal block grant money. Currently under consideration is a resolution to define what is known as a "good economic citizen."
The "good economic citizen" proposal is based on the notion that if the city is to provide tax breaks, funding or other incentives to potential employers, those employers must demonstrate a willingness to play by the city's rules, such as abiding by fair and progressive labor practices, and-perhaps-guaranteeing that their employees are paid a living wage.
In cities elsewhere in the country, where living wage laws have been proposed, they have been met with virulent opposition, and Missoula will likely be no exception. Opponents-mostly in the business sector-claim that a living wage law will cause large increases in the costs of public contracts, lead to increased unemployment, cause companies to drop out of bidding for public contracts, and generally result in new businesses avoiding Missoula for fear of an unfavorable business climate.
As debate moves forward on this issue, it's worth keeping in mind the example of Baltimore, which passed a living wage law back in December of 1994. Approved despite strong opposition from the city's business community, the city of Baltimore found that the cost of city contracts actually decreased, and among companies that held contracts before and after enactment of the law, none reported layoffs.
The cost to taxpayers was also minimal, at about 17 cents per person annually. Most significantly, there was no evidence that businesses responded negatively to the passage of the ordinance. In fact, the value of business investment in the city of Baltimore actually increased substantially in the year after passage of the law. In short, the living wage proved to be as viable an option for business as it was for workers.