In November Milwaukee voters overwhelmingly passed an ordinance that guarantees workers the right to earn paid sick days. Milwaukee joined San Francisco and Washington DC as the third city to require these benefits. The referendum passed by a margin of almost 70% to 30%.
Despite the overwhelming margin of victory, the Milwaukee Metropolitan Chamber of Commerce (MMAC) has aggressively opposed the measure.
Two weeks ago the organization filed a lawsuit against the city seeking to strike down the law. The MMAC is also asking for a temporary injunction to block the city from enforcing the legislation that is scheduled to go into effect on February 10, 2009.
The MMAC's opposition, while short-sighted, is not unexpected. Business organizations have consistently opposed social legislation like laws outlawing child labor and discrimination or regulating business behavior like the Clean Air Act. For the past three decades they have aggressively opposed any effort to raise the minimum wage even as its real real value has fallen to historic lows. Their consistent opposition makes some sense since such legislature imposes costs or at least prevents businesses from externalizing their costs, thus reducing rates of profit. The long-term benefits of increased employee loyalty and productivity and reduced hiring and retraining costs are seldom acknowledged.
But Tim Sheehy and other MMAC spokesman have stooped to new a new low in their desperate attempt to discredit Milwaukee's new ordinance.
The MMAC's Steve Bass, a former Republican assembly operative , labeled the new law "a sort of terrorism."
It is perverse to equate providing employees with time off when they or a child is ill with suicide bombings. The former provides workers with a humane benefit so that they no longer need to choose between their job and caring for their family, while the latter uses murder to terrorize the general population. Additionally, Bass's rhetoric belittles the lives and sacrifice of the victims of terrorist attacks and those who have died trying to bring the perpetrators of political violence to justice.
Not to be outdone, the MMAC's President Tim Sheehy claims the ordinance is affecting job growth in Milwaukee and predicts "dire economic consequences."
But Milwaukee's labor market had collapsed and the city's workers were experiencing what the UWM Center for Economic Development has characterized as "a stealth depression" long before this ordinance was passed.
Exactly what job growth is Mr. Sheehy claiming the City has lost?
The country is experiencing the worst recession since the Great Depression. We lost half a million jobs last month and 2 million in the last year. Business investment has collapsed, a victim of the housing bubble's collapse and the resulting financial sector's meltdown.
Last year, Wisconsin lost 32,4000 jobs. The Department of Revenue is projecting that Wisconsin will lose another 37,700 manufacturing jobs (7.7% of the state's total) and 121,000 construction jobs( 5% of all construction jobs) next year.
Milwaukee is hemorrhaging jobs. Two thousand two-hundred and sixty-six (2,266) more Milwaukeans were unemployed in September 2008 than a year ago, long before the sick day ordinance was passed. Milwaukee ranks a dismal 34th among 50 cities in the annual rate of employment growth, has the 2nd worst rate of black male unemployment and the worst black-white unemployment ratio in the nation.
The simple fact is that long before the sick day referendum passed, business investment in new plant and equipment had collapsed and companies were laying off workers at an alarming rate. In addition, many of the firms like Crazy Water, Outpost Natural Foods, and Lackey and Joys, whose spokesmen have opposed the ordinance, won't abandon their Milwaukee location in response to a marginal cost increase because they require access to the city's market. As realtors always tell us: "location, location, location!"
Mr. Sheehy's concern over Milwaukee job loss is also hard to take seriously since the MMAC has consistently promoted policies that have destroy local jobs and drive down wages.
The MMAC was a vocal proponent of NAFTA and other free trade agreements that have contributed to a reduction of employment in high-wage traded-goods industries, growing wage inequality, and a steady decline in demand for workers without a college education.
NAFTA alone cost Wisconsin 25,403 (-0.9%) jobs between 1994 and 2006.
The MMAC has also aggressively promoted trade with China. The organization's China Business Council has even sponsored tours of China. Yet, between 2001 and 2006 Wisconsin lost 38,000 jobs because of the growing trade deficit with China.
And Mr. Sheehy actively opposed the County's advisory sales tax referendum aimed at providing a dedicated source of revenue to the County's beleaguered transit system. Sheehy actually authored a letter to Milwaukee's County Board members urging them to uphold County Executive Walker's veto of the referendum.
Mr. Sheehy surely knows that one of the major impediments to economic development in Southeastern Wisconsin is the spacial mismatch between large numbers of unemployed workers, disproportionately African-American, living in Milwaukee's central city, and employers located in suburban and ex-urban locations who have had difficulty finding qualified workers. Key to addressing this problem is a mass transit system that links people to jobs. Yet Sheehy and the MMAC opposed the County's advisory referendum designed to address this mismatch. Republican partisan politics trumped investing in the regional economy. The economic consequences of the MCTS's deterioration is nothing short of "dire."
The "stealth depression" in the city of Milwaukee's labor market calls for bold, new departures in public policy. Yet the MMAC has opposed initiatives in public investment, regional cooperation, reducing metro-wide racial segregation, industrial policy, and community benefits agreements that should be part of an aggressive anti-unemployment strategy in the city.
The MMAC's use of scare tactics to oppose the sick pay legislation is consistent with this dismal record. Rather than waste the city's scarce tax dollars in a lengthy court case, the MMAC and the firms it represents should obey the law. They might just discover that when businesses treat their workers humanely, their employees will be more loyal and productive and replacement and training costs will decline.