Paying Living Wage – One Synagogue’s Experience

Categories: Letters From Leadership

The Conservative movement is roiled in another controversy.  This time it isn’t whether women count in a minyan or whether gays can be rabbis but whether halachically observant Jews are required to pay their employees a “living wage”.

A “living wage” is defined as a wage sufficient for a full time worker to live above the poverty level in a particular location.   The “living wage” is typically higher than the “minimum wage”, which is the legally mandated lowest hourly wage.  There is a federal minimum wage but some localities set local minimum wages, which can be higher but not lower than the federal minimum.  The “prevailing wage” or “market wage” is the wage commonly paid in a certain market for a certain job, and reflects the supply of workers willing and able to do a particular job versus the demand for such workers.

The objection to halachically mandating the living wage is that it puts observant business owners at a severe competitive disadvantage relative to those not handicapped by the requirement to pay this higher  (above market) wage.  The main argument in favor is that Jews have an obligation not to enrich themselves by impoverishing others.   But in fact, reality is more complex than this simplistic  “high wages will drive Jews out of business” vs. “ Jews cannot profit by paying others too little.”  My own experience with the living wage comes from the nonprofit sector but shows some of the other factors involved.

About eight years ago, as my Reconstructionist congregation prepared to move into its new building, a proposal was made that we pay our janitorial staff a “living wage, ” which was considerably higher than the prevailing wage for janitorial services in the Washington DC area.  At the time, I was the vice president charged with facilities use planning and also “on deck” as the next president.   As we built our new home, we had saddled our members with building funds and aggressively solicited capital campaign contributions so the board had kept dues increases at a minimum and also cut out most other fundraising.   I anticipated taking over a congregation with a large operating deficit, a very large mortgage, not enough members to support the building, and largely unknown operating expenses.  I was not impressed with arguments that we had an ethical obligation to double our janitorial costs.

By the time the proposal was made, we had already researched how janitorial services were handled at other area synagogues and discovered that the vast majority of congregations used the services of one non-union janitorial services contractor.  All the congregations we spoke to were satisfied with this company’s services.  The problems arose when, in response to the living wage proposal, we looked behind the contract and discovered that the employees were earning about $7 per hour, more than the local minimum wage but far below the local living wage of roughly $11per hour.  In addition, employees needed to work for the company for several years before they were eligible to purchase health insurance.  Since health care costs are exorbitant without health insurance, many people argue that providing health insurance must be part of a living wage package.

After exploring several other options, we decided to use the janitorial service specializing in synagogues but negotiate a higher wage for the janitors who would work for us. Given what an important issue this was in our congregation, we were shocked to learn that no other congregation had ever asked the owner about the wages paid the employees or about the availability of health insurance.

In the end, we contracted for fewer hours than recommended and cut the “living wage premium” by about 25% for the first year.  Overall, the increased cost of janitorial services translated into about $35 per year for each member household. This was just one factor in a much larger dues increase and  came at a time when we desperately needed new members to help pay the mortgage. Both the rabbi (who was an enthusiastic proponent of the living wage proposal) and I (who was still not) wrote lengthy cheerleading pieces to sell the dues increase.  And while there was plenty of negative feedback about the huge increase, only one (soon to be ex) member objected specifically to the living wage premium implicit in the dues.

I expected nothing in our day-to-day operations to be affected by our decision to pay a (nearly) living wage.  It turned out that I was mistaken.

We had been warned that as a new congregation we could expect a lot of turn over in janitorial staff.  This would be inconvenient, but this was just the way things went for new congregations.  In actuality, our experience could not have been more different.

As soon as word got out that we were paying more than the prevailing wage, the best short tenure employees in the janitorial services company asked to work for us.  While a few very long-term supervisory employees at large congregations earned as much as we were paying, there were not many opportunities for newer employees to earn this much.   We found we had a choice of excellent workers to choose from.  Very quickly, we had an excellent, conscientious team comprised of one full time employee and one regular part-time employee.

Our first regular full time employee was a Central American immigrant with a BA in accounting from his home country.  Since coming to the US, he had been working two menial jobs to make ends meet.  Now, able to live on one job, he asked to adjust his hours so that he could take evening classes in professional English at the local community college.   After working for us for a few years and going to school, he was able to take the CPA exam in English and return to working in his profession.   While he worked for us, he was an outstanding employee who valued us as much as we valued him.

When the first full time employee moved on, our next full time employee proved so competent that we decided to terminate the contract with janitorial services company and allow him to hire and supervise his part time co-workers.

After the first year, we learned that although our employees were offered health insurance, they did not purchase it because they felt they could not afford it.   We adjusted our contract so that we increased our share of the insurance premium but required our employees to purchase health insurance unless they could show that they were insured elsewhere.

Within six months of forcing health insurance on our employees, one of our workers became very ill.  He later told us that he had not seen a doctor since coming to the US and would not have gone to the hospital in this case either, not matter how ill he became, because he knew he could not afford it.  As it turned out, he did go to the hospital fairly early in his illness and was diagnosed with acute appendicitis, had surgery and made a full and quick recovery.  To this day, he says that the congregation saved his life.

The lessons I draw from my first hand experience with the living wage issue may not be applicable to every business situation. After all, salaries for low wage employees make up only about five percent of our budget.   For some businesses, salaries of low-wage workers are a major cost of doing business. Yet, those who are fighting against making this a halachic requirement should consider that there are benefits waiting for them besides the psychic ones of knowing that their employees are better paid.  Our experience is that by paying more that the prevailing wage we attracted the excellent employees who were unusually dedicated to their jobs. They knew that if they lost the job with us, they would be unlikely to find one that paid as well.  They were also able to cut back on their other jobs so they had more energy when working for us. Partly because they weren’t torn between more than one job, we also experienced a low level of absenteeism.  Due to the quality of our workers, we were eventually able to cut out a layer of supervision.  While my economics training tells me that the rational employer would already be paying more if these benefits were worth the cost, my real world experience suggests that it is possible for an entire sector (e.g., synagogues in the DC region) to overlook this benefit while focusing on the bottom line of costs.

Now, this is not to say that the extra expense was not without consequence.  Our dues are a bit higher than they would be if we paid our janitors less and didn’t insist that they have health insurance.  We are still struggling to get to our target level of membership but it is hard to argue that we would have significantly more members if dues were $50 or $100 lower.   We are in a very competitive market, but the competition is complex and people weigh many factors in deciding what congregation to join.  I hope that those who hear that we pay our janitorial staff a living wage weigh that in our favor.  It says a lot about the way our congregation conducts itself on many other levels as well.

Before mandating that every observant Jew pay employees the living wage, the Conservative movement might trying leading by example and strongly urging its congregations to pay janitors the living wage.  That way, congregation members can see for themselves the difference the living wage can make.

About Judith Gelman, Vice President and Chair of the Executive Committee

Judith Gelman is the Chair of Ameinu’s Executive Committee and serves as the Chair of the Fundraising and Membership Committee. She also serves on the Executive Committee of the Habonim Dror Foundation and on the Camp Committee for Habonim Dror Camp Moshava, where her three children represent the fourth generation of her family associated with the camp. Prior to attending Oberlin College and MIT, Judith participated in the Habonim’s 23rd Workshop at Maayan Baruch. In addition to her work with Ameinu and Habonim Dror, Judith sits on the International Council of the New Israel Fund and on the NIF DC Local Council. Judy also serves on the Montgomery County, MD Steering Committee for J Street and on the board of a local private high school. She is a former President of Adat Shalom Reconstructionist Congregation in Bethesda, MD. She has previously worked for the Council of Economic Advisers and the Federal Trade Commission, and is currently employed at Salop Economics in Washington, DC.
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