Ann Arbor Living Wage Bumps Upward

On its April 16, 2012 meeting agenda, the Ann Arbor city council recorded in its written communications a memo from its financial services staff about the city’s living wage. The wage, as defined by city ordinance Chapter 23, Section 1:815, will be raised slightly in order to conform with the ordinance.

The new wage is set at $12.17/hour for those employers paying health insurance and $13.57/hour for those employers not paying health insurance. The previous minimum hourly rates were $11.83/hour for those employers paying health insurance, and $13.19/hour for those employers not paying health insurance. The wage is evaluated each year, and this year is the second year in a row that the wage will increase. The living wage was raised to last year’s level from $11.71 per hour for employers offering health insurance and $13.06 per hour for those who don’t offer health insurance. The wage previously had stayed flat at those levels for a few years.

The Ann Arbor city ordinance applies to the wages that must be paid by companies that have contracts with the city worth more than $10,000. Passed in 2001, the city’s living wage ordinance stipulated in that year that workers of vendors holding contracts with the city had to pay their employees a minimum of $8.70/hour if the contractor provided employee health care and $10.20/hour if not.

The ordinance provides a mechanism for increasing the living wage based on federal poverty guidelines. Ann Arbor’s living wage is to be increased each year by “… a percentage equal to the percentage increase, if any, in the federal poverty guidelines as published by the United States Department of Health and Human Services …” The guidelines showed the federal poverty level for a family of three in 2011 was $18,530, compared to $19,090 this year – for an increase of 2.9%. So the living wage kept pace with that increase. The new living wage will take effect on May 1, 2012.