The City Council approved a plan last month requiring city service contractors to pay their employees a living wage, defined as $10 an hour with health insurance or $12 without. Though a division of city government, Memphis Light, Gas & Water (MLGW) wasn't included in the original resolution, and now its labor union is pushing for the same requirement for companies that contract with MLGW.
After Bill Hawkins of the International Brotherhood of Electrical Workers (IBEW) Local Union 1288 asked the council during a public-comments period if the measure included MLGW contractors, the issue was referred to committee.
This week, the council referred the issue to the MLGW board of directors. They'll have 90 days to determine if a living wage for contractors would affect the price of utility rates.
According to Hawkins, some contracted workers are currently being paid minimum wage.
"We hadn't really thought about [MLGW] before," said Rebekah Jordan, who, as head of the Living Wage Coalition has been fighting for the city service contract ordinance for two years. "We definitely want to follow up with [the MLGW resolution] though, because if the city is going to do this for their contractors, MLGW should do the same."
"MLGW has $2 billion coming in a year, and a big portion of that is being spent on contracts," said Rick Thompson, business manager for IBEW Local 1288.
MLGW contracts with companies to provide services in seasonal ground maintenance at its substations, pest control, courier service, janitorial work, as well as utility construction work such as installing city streetlights and laying gas and water pipes.
"We use service contracts if there's a service that's not being done by our employees or we don't have the specific knowledge to perform what needs to be done," said Chris Stanley, an MLGW spokesman. "Or if we don't have enough employees to lead the work, like with seasonal construction shifts, we bring in contract employees."
Stanley said MLGW does not have any say in how much those employees are paid by their employers.
Council members are open to the resolution. "We need to get some numbers, but MLGW is in much better shape financially than the city, so they're in a stronger position for us to look at [enacting a living wage]," said council member Carol Chumney.
Councilman Dedrick Brittenum agreed. He said that "it makes sense to include MLGW" since the council has already decided to extend a living wage for city contracts.
But Brent Taylor, the council member who cast the lone dissenting vote on the living wage resolution for city contracts, said he'll do the same when the MLGW issue comes up for a vote.
"I think wages are better set by the private sector than by government," said Taylor. "Eventually, the higher cost is going to be passed on to the MLGW ratepayers. If we adopt this, I don't think rates will go up the next week. But it obviously increases costs, so a rate increase will be necessary."
Jordan said research in other cities shows the overall cost is minimal with regard to living wage ordinances.