News Story

Death for Ann Arbor's 'Living Wage'?

One of the entry-level jobs at the City of Ann Arbor's waste transfer station entails separating glass bottles from aluminum as they come down a conveyor belt.

For that job, FCR, the company that manages the waste station, usually pays the minimum wage of $7.40 an hour.

But because the city of Ann Arbor passed a "living wage" ordinance, those sorters make $13.05 an hour this year. Thanks to a deal struck with the City Council, the city reimburses FCR so that it can pay the higher "living wage."

But a recent Michigan Supreme Court decision may invalidate such arrangements, as cities no longer have the authority to mandate wages with contractors they hire, says Paul Kersey, director of labor policy at the Mackinac Center for Public Policy.

Last September, the Michigan Court of Appeals found that Detroit's living wage ordinance was invalid under state law, upholding a 1923 decision, Lennane v. Detroit. Earlier this month, the Michigan Supreme Court decided by a 6-1 vote not to hear an appeal on the Court of Appeals' decision.

Kersey said that leads him to believe the living wage ordinances are invalid in the dozen-or-so communities that have them.

City of Ann Arbor City attorney Stephen Postema said his office is looking into the matter.

Kersey said someone will have to file suit in each of the communities to invalidate the ordinances.

"The next step is for an individual or a company in Ann Arbor who is affected by this legislation to file suit to have the law set aside," Kersey said.

In Ann Arbor, the living wage is $11.71 per hour if the company provides insurance and $13.06 an hour if no insurance is provided. Companies with fewer than five employees and nonprofits with fewer than 10 employees are exempt.