Letter from Robert Moore

President, District 1199E-DC 

Greetings,

We are pleased to present to you our report, Putting Baltimore's People First: Keys to Responsible Economic Development of Our City.

The report shows that successful economic development for Baltimore City requires a shift in paradigms to a self-sustaining wage for workers that will in turn, power the redevelopment of the city. Investor-oriented development projects, offering low-paid service jobs, have failed to stem the flow of people and wealth from Baltimore City Health care, which dominates the service sector, pays wages so low that many service workers are eligible for public assistance programs.

Nearly one out of every five workers in Baltimore City is a health care worker, most of whom work in Baltimore's hospitals. SEIU 1199E-DC represents service employees at Johns Hopkins, Greater Baltimore Center, Sinai Hospital, and Maryland General Hospital. Johns Hopkins Health System employs 35% of the City's hospital workers.

For too long, these service workers' pay has been based on "labor market competition." However, Johns Hopkins has come to dominate the Baltimore City market for service employees and pays so low that the "market" is actually created in large measure by Hopkins' low wages. We must confront the "myth of the market."

A typical Hopkins service hospital worker (an orderly, a dietary aide, a housekeeping aide) earns so little -- on average, $11.36 an hour -- that he or she is eligible for public assistance programs that cost taxpayers as much as $13,500 annually. After 40 years, a typical pension  for this class of workers at Johns Hopkins Hospital is $983 per month.

An independent study by Dr. Diana Pearce entitled, The Self-Sufficiency Standard for Maryland, prepared by the Advocates for Children and Youth and the Center for Poverty Solutions in December 2001, concluded that a wage of $17.41 per hour is needed for a single parent supporting two children to live without outside support.

We call this the "self-sufficiency standard." We believe it is long overdue that this paradigm, the "self-sufficiency paradigm," replaces the "market" paradigm.

We believe that this paradigm shift is necessary not just to improve the lives of the workers in Baltimore's fastest growing industry, but also to ensure Baltimore, once a prosperous manufacturing city, has a future in the post-industrial age. Until wages in Baltimore reach self-sufficiency, home ownership will continue to fall, high school drop out rates will rise, and all the social indicators of poverty will worsen.

After reviewing Baltimore's economic history, Putting Baltimore's People First concludes that investor-driven development has poorly served the City's residents and advocates stimulating economic growth by raising the incomes of low-wage workers. Low wage workers tend to spend more of their money locally on goods and services in their own neighborhoods. A raise for these workers raises the incomes and revenues of everyone in the community.

Public opinion supports this analysis. In a December 2003 poll, Baltimore City and suburban residents agreed by 88% that lifting wages to middle-class levels is more effective to improve the local economy than giving tax incentives to businesses.

Unions and the labor movement are the main social-economic vehicle of a wage-driven strategy. All through our history, unions have been the most consistent driver of middle-class wages. This Union has a responsibility to continue its tradition of driving economic development through improved conditions of employment.

Today, however, workers who wish to improve their situation by organizing into a union are faced with intimidating tactics, firings, and threats of both a personal and economic nature. The laws are weak, and the anti-union behavior of employers has reached an unprecedented level. Therefore, our campaign for economic development includes support for a policy of non-interference in the right to worker self-organization.

Currently, the Union is in contract talks with the hospitals, including Johns Hopkins. We want the community and its leaders to be aware that the Union has no interest in a contract that does not begin to shift the community into a new way of thinking about these deep economic issues.

The hospitals will tell you that they pay at or above the average "market" wage for the service employees. They are willing to improve those wages according to the cost-of-living, about 2.5%. If you earn $11/hour, that's 22 cents an hour, or $457/year. This approach will only serve to deepen economic stagnation in a city that is already in deep crisis.

In the same poll referred to earlier, when asked 86% of Baltimore residents agreed that no man or woman who gets up and goes to work every day and plays by all the rules should have to raise their family in poverty because they aren't paid enough money.

We call upon civic leaders to stand with us and help us find the right partnership with Baltimore's business and health care industry leadership. Together, we must find the way to real economic development by seeing to it that our City's largest industry pays self-sufficient wages.

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The Cost of a Decent Life 

for a Service Worker at Johns Hopkins Hospital

Household income needed for a Decent Life in Baltimore for a single parent supporting one pre-school and one school-age child:

The self-sufficiency wage for a three person family in Baltimore is $17.41

Pearce, Diana. The Self-Sufficiency Standard for Maryland. Prepared for Advocates for Children and Youth and the Center for Poverty Solutions, December 2001.

Where Union Hospital Workers Live (Map Left0   The Need for Wage-Driven Economic Development in Baltimore

Hospital Service workers are overwhelmingly concentrated in come of the most economically depressed parts of the City. In neighborhoods where these hospitals workers live, the effects of low wages on the level of development are obvious.

According to survey of employees, the per capita income in the zip codes with the greatest density of unionized hospital workers in Baltimore was $12,740 in 2000, little more than half of the national average of $21,587. [Zip codes with the greatest density of members of SEIU District 1199E-DC are 21202, 21205, 21213, 21215, and 21217. US Census Bureau, Census 2000]

The average poverty rate in those zip codes was 31.4%, more than twice that of the US as a whole. the unemployment rate in 200 was 15.7%, nearly three times as high as the national average.

Finally, the high school dropout rate was 18.9%, in comparison to 9.8% nationwide. Without a job base that allows workers to earn middle-class wages, real development will remain elusive for these communities.

The economic impact of a raise in hospital wages to self-sufficiency levels would be substantial. the average wage for service and maintenance workers at Johns Hopkins, GBMC, and Sinai Hospitals is $11.11.

According to the Department of Commerce's multiplier model . . . a wage increase of $17.41 per hour would create a substantial infusion of new income and consumption in the Baltimore area, targeted strategically at neighborhoods where low-income hospital workers live.

Such an increase at the three hospitals would create an additional $197 million in income over three years -- a dramatic impact for these struggling communities.

Source: Putting Baltimore's People First: Keys to Responsible Economic Development of Our City (2004). For your copy contact: District 1199E-DC, SEIU, AFL-CIO / 611 N. Eutaw Street, 2nd Floor, Baltimore, MD 21217 / 410.332.1199 / 202.328.0321 / Fax: 410.332.1291

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update 24 July 2008