Memphis finance director Roland McElrath told the City Council's budget committee this morning that the living wage ordinance, passed in 2006, was "not a large impact" on the city budget.
The city's living wage ordinance stipulated that all city contractors must pay their employees a living wage, at least $10 an hour plus health benefits. Since that time, the ordinance has been amended to include an annual living wage report.
The city's finance division looked at contracts from several service areas both before and after the living wage ordinance went into effect. In security contracts, for example, the cost went up $253,000, or about 17 percent.
"We attribute that bulk of that increase to the living wage," McElrath said. "We concluded that there is some impact, but it's not a large impact. If you compare $253,000 to the total operating budget, it's a very small number."
In some categories, such as legal services, the city did not see any impact with the ordinance, because those employees already made more than $10 an hour.
McElrath said they had not studied the impact of the ordinance on workers, but at least one council member thought it made a difference.
"I feel good about the living wage ordinance and I'm glad we passed it," said Barbara Swearengen Ware. "People deserve a living wage. ... I think we've done the right thing and we need to continue to do the right thing."
The Tennessee legislature is currently considering a prevailing wage bill that would prohibit local governments from setting wages higher than the minimum wage.
It has passed the state senate and goes before a house sub-committee this afternoon.