Quick Hit Aaron Krager Wednesday November 2nd, 2011, 3:41pm

Report: Living Wages At Airports Good For Local Economy (VIDEO)

Chicago aldermen pushing for the Stable Jobs, Stable Airports ordinance received a boost yesterday when an independent study was released showing that millions of extra dollars can be added to the local economy through increased workers’ wages. The study (PDF), conducted by professors at the University of Chicago and Roosevelt University, determined that more than $8 million could be injected into the economy if the living wage gap were closed for Midway and O’Hare airport concession workers.

Virginia Parks, a professor at the University of Chicago and co-author of the new report, spoke of the challenges facing low wage workers. More specifically, the tough choice of which needs can be met financially versus the ones that cannot. Parks believes the increased wages would provide more flexibility for workers and increase their spending in the local economy.

“This would be an increase in annual income of about $4,000 per full-time worker covered, from roughly $18,000 to $22,000 a year,” said the report's cost-benefit analysis of the proposed Stable Jobs, Stable Airports Ordinance. While many researchers suggest that the higher incomes would still not meet a minimally-adequate standard of living, the increased wages would nonetheless have a substantial positive impact on the live of the workers and their families. Some airport workers at yesterday's public forum on the report release explain how a wage increase would positively impact their lives:

According to the report, the resulting pay increase from the ordinance would cost less than $7 million and could be paid for by a combination of efforts. With reduced turnover through the higher pay and the 90-day trial period guaranteed in the ordinance, concession companies would see at least a $700,000 reduction in training costs. A slight cost passed off to customers at each airport would also offset the total costs by 16 cents at O’Hare and 21 cents at Midway per trip. If the concession companies ate the entire cost of the wage increase, the study estimates that profits would be reduced by 14 percent to 16 percent at O’Hare and 23 percent to 27 percent at Midway. "Despite these reductions, concessions companies at both airports would still enjoy above-average profit margins compared to “on the street” counterparts – that is, stores located outside airports," reads the report.

“LAX has not passed on these costs to customers,” said Parks. “We feel very confident at the end of the day that Chicago would only benefit.”

Alderman Jason Ervin’s (28th) ordinance aims to finally include airport concession workers in Chicago’s living wage protections for contracted employees. Airports around the nation, including those in Los Angeles, San Francisco, Miami, and Atlanta, have all implemented living wage standards for airport concession workers. Madeline Janis, of the Los Angeles Alliance for a New Economy, also presented at the public forum touting her organization’s long road to victory; including a provision for full family health benefits in 2009.

A recent concession bidding war ensued at LAX without a peep from the companies about the living wages or benefit standards, according to Janis. Her organization conducted a survey of 80 companies and 325 workers showing lower turnover and training costs.

Between 1,600 and 2,400 workers at both Chicago airports would see a benefit from the passing of the ordinance. Ervin doesn’t believe the ordinance will appear before committee until December or after the new year because of the focus on the budget. A total of 31 aldermen signed onto the ordinance, growing from about 20 when he initially introduced it to the public.

In a committee meeting last week, Airport Commissioner Rosemarie Andolino was asked by aldermen her opinion of the ordinance. Ald. Joe Moreno pushed her and believes the council merely needs to move on and vote on the ordinance. Andolino, speaking as a member of the mayor’s administration, said, “I don’t think it should be legislated.” She also called it a state issue misstating Los Angeles as state law when it was legislated by the city and called upon market forces to determine pay. But Andolino does not believe the number of bids would diminish, if passed.

“Minimum wage was designed for while you were in high school living with your mom,” said Ervin at the public forum. “It wasn’t designed to make a living off."

Image: franchiseperfection.com


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