| | | | | | | | | TO: | Finance and Economic Resiliency Committee Members
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| FROM:
| Alina T. Hudak, City Manager |
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| | DATE: | July 28, 2023
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| | SUBJECT: | DISCUSSION REGARDING THE LIVING WAGE RATES FOR THE CALENDAR YEAR BEGINNING JANUARY 1, 2024, IN ACCORDANCE WITH CHAPTER 2, ARTICLE VI, DIVISION 6, SECTION 2 - 408, OF THE CITY CODE. |
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| | | | | | | | HISTORY:
| Section 2-408 of the City Code requires, for certain service contracts, that contractors pay employees the living wage rates that the City Commission has approved for any given year. The current living wage rates, which were approved by the City Commission in September 2022 and became effective on January 1, 2023, are:
· $15.61 per hour without health care benefits; or
· $12.26 per hour with health care benefits of at least $3.35 per hour.
The City Code stipulates that the living wage rates may be adjusted annually for inflation by the City Commission. Typically, rate increases are considered by the City Commission during annual budget discussions, as any increase will have a budgetary impact because contract rates are adjusted to compensate for the increased wage requirement. As is customary, the Administration refers an item annually to the Finance and Economic Resiliency Committee for a discussion on adjusting the living wage rates for the subsequent year. Accordingly, on March 27, 2023, the Mayor and City Commission approved a referral to the Finance and Economic Resiliency Committee for a discussion and recommendation to the City Commission on any increases to the current living wage rates that the City Commission may want to consider for the calendar year beginning January 1, 2024.
As background information, the living wage rates for local entities that enforce a living wage requirement are listed in the table below.
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Current Hourly Rate without Health Care Benefits
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Current Hourly Rate with Health Care Benefits
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Hourly Rate
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Health Benefits Rate
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Miami Beach
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$15.61
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$12.26
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$3.35
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Miami
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$15.00
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$13.19
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$1.81
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Broward County
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$18.65
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$15.00
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$3.65
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Miami-Dade County
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$18.73
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$15.03
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$3.70
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| | | | | | | | ANALYSIS:
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As stipulated in the City Code, living wage rate increases may not exceed the local area's corresponding Consumer Price Index ("CPI") or the cost of living (COLA) adjustment approved for unclassified staff. The CPI increase for the local area for the preceding year (January - December 2023) was approximately 9.9% for the overall CPI and 3.4% for the medical services CPI. On September 28, 2022, the Mayor and Commission approved a COLA increase of three percent (3%) effective April 10, 2023.
Despite a greater increase in the CPI index, the City Code stipulates that the increase to the living wage rates may not exceed the COLA increase approved for unclassified employees. Therefore, any living wage increase recommended in the current budget cycle will be capped at 3%.
To assist the Committee with determining the recommended increase, if any, to the living wage rates for the subsequent calendar year, the Administration has calculated the fiscal impact of each 1% increase (up to 3%) to the living wage rate. See the tables below.
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| | | | | | | | CONCLUSION:
| The purpose of the information included herein is to assist the Committee in discussing and recommending to the City Commission the living wage rates for the calendar year beginning January 1, 2024. |
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| | | | | | | | | Is this a "Residents Right to Know" item, pursuant to City Code Section 2-14? | | Does this item utilize G.O. Bond Funds? | | | No | | No | |
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