Mayor Bill Purcell unveils his new city budget later this week, and one piece eagerly awaited is the pay plan for Metro employees. Of particular interest is how the plan will treat Metro’s lowest-wage workers.

Until a couple of weeks ago, an energetic coalition of community groups and organized labor was pushing a living-wage ordinance in Metro Council that would have implemented a minimum hourly wage of $9.78 for city employees. Horrified at the prospect of mandating a pay level that would lift full-time workers out of poverty, a collection of business interests formed a coalition of their own to oppugn any such legislation. The business alliance’s orchestrated campaign of distortion about the effects of a living wage managed to scare off some early Metro Council supporters, but it didn’t dismantle a sympathetic Council majority or extinguish the broader living-wage movement.

Ultimately, though, the momentum behind a living-wage ordinance was halted by an opinion from the Metro Law Department that raised doubts about the Council’s authority to pass laws establishing wages. At that point, living-wage backers pulled the measure, and instead gained passage last week (by an overwhelming 32-1 vote) of a non-binding Council resolution urging that Metro pay plans include a base wage rate equaling 100 percent of the federal poverty line for a family of four—currently $8.50 per hour.

Purcell opposed the living-wage ordinance from the start, buying into the business coalition’s hyperbolic claims that it would artificially set a minimum wage for the local labor market and discourage private investment in Davidson County. He argued that low-wage city workers would instead get a fair shake from the compensation review of Metro wages completed earlier this spring by the consulting firm William M. Mercer Inc. Purcell insisted last week that the pay plan in his budget—presumably guided by the Mercer study—will address the city’s lowest-paid employees.

So what are the chances that the mayor’s budget will enable the city and its citizens to move beyond the shame of using tax dollars to finance poverty-wage work? Will a city pay plan that grows out of the Mercer compensation study mean that city workers can make basic ends meet without falling into poverty or relying on public assistance—the basic notion of a living wage? The answer is plainly and simply no, for two fundamental reasons: First, the Mercer study is flawed in ways that particularly limit low-wage job prospects for better pay, and second, opponents of higher minimum wages are in sheer denial about the actual cost of (very basic) living in Nashville.

Since its release in mid-April, the Mercer study has more or less been venerated as divine wisdom on compensation. Nashvillians have apparently not yet come to appreciate that even a consultant billing himself as a “world leader” in his field needs to have his work product carefully scrutinized and critiqued. Vanderbilt sociology professor Ronnie Steinberg, who has more than two decades of experience as an expert in compensation practices, has examined closely Mercer’s report and met with its consultants. She describes it as “a very poor piece of research” that is neither objective nor systematic.

As a general matter, Steinberg is highly critical of the overall method Mercer used to sample comparison jobs and employers for determining market wages. Rather than systematically and scientifically sampling firms or municipalities that actually compete with Metro for workers, the Mercer study is based on a collection of existing surveys that happened to be available. It also uses different surveys and different “markets” to examine different Metro jobs and fails to divulge the identity of specific comparison firms. Thus, Steinberg observes, “it is impossible to determine independently whether actual Metro competitors were used as the basis for proposing new wages for Metro employees.”

The Mercer study appears biased against low-wage jobs in two ways. First, according to Steinberg, Mercer overemphasized managerial occupations and addressed only a small sample of Metro’s low-wage jobs. As a result, she says, “those very low-wage jobs that are underrepresented in this study are also those that would most likely benefit from a living-wage ordinance.”

Second, Mercer’s pay-scale recommendations are based on an assumption that it takes employees four years to become sufficiently competent in their jobs to earn the wage that they identify as the “market standard.” Calling this an “unsupported assumption,” Steinberg notes that “while it may well take some high-level managers four years to become competent, it is unlikely that it would take that long for all employees to become competent.” The result is a pay structure that forces low-wage workers to earn sub-market wages for as long as four years before they are deemed as deserving of the median market-wage level.

Putting aside any particular critique of the Mercer study, a pay plan is not going to ensure economic independence for low-wage workers unless it’s clear how much money people need to achieve that independence. There’s been a lot of press and a lot of controversy around the living-wage campaign and its erstwhile proposed ordinance, but little has been said about what the basic cost of living in Nashville might actually be.

The business lobby has been so hasty and fervid in its abject dismissal of a regulated living wage that the meaning of an actual living wage has been entirely obscured. Some simple arithmetic sheds light on the matter.

Vanderbilt’s Steinberg and research assistants Alisa Palmisano and Maria Tsagaris recently developed some conservative estimates of the basic cost of unsubsidized local survival. Their numbers have been slightly modified here, mostly in a downward direction, after adjusting a few assumptions. Here’s how it shakes out in seven key categories for a household of two individuals: one working adult earning about $9 an hour (some estimates require an income-level assumption), and one child aged 6-8.

♦ Housing: The U.S. Department of Housing and Urban Development estimates that the fair-market rent for a two-bedroom apartment of standard quality (defined as just the 40th percentile rent), including all utilities except telephone, is $630 per month, or $7,560 annually.

♦ Food: The Center for Nutrition Policy and Promotion of the U.S. Department of Agriculture estimates a low-cost food plan for the hypothetical two-person household at $270 per month.

♦ Child care: Estimating the cost of after-school group care during the nine-month school year at $130 per month, and assuming full-time child care for 12 weeks of summer at $80 per week, we reach an annual child-care expense of $2,130.

♦ Health care: Assuming that the two-person household is on TennCare, the premium for their income level would be about $75 per month. Factoring in a modest $200 for co-payments and other out-of-pocket expenses, the total is about $1,100 for the year. Obviously, that cost would be much higher with ordinary private-market insurance.

♦ Transportation: The Consumer Expenditure Survey of the U.S. Bureau of Labor Statistics estimates that a two-person household at this income level incurs annual automobile expenses for gasoline, oil, maintenance, repair, and insurance of $1,924. (Given Nashville’s deficient system of public transit, a realistic cost-of-living estimate necessarily must emphasize private automobile use.)

♦ Apparel, personal care, housekeeping supplies: The federal Consumer Expenditure Survey estimates that a household with this income spends about $1,337 a year.

♦ Taxes: The Vanderbilt research team sketched out a hypothetical tax return, taking into account payroll and income taxes, sales taxes, the earned-income tax credit, and appropriate child deductions and exemptions, yielding an estimated annual tax bill of $2,256.

As the calculation in the accompanying table reveals, coverage of just these basic needs associated with economic independence for a two-person household requires a wage rate of $9.40 an hour. That rate would permit merely a subsistence lifestyle. A few of the things not included in that budget: durable goods (computers, appliances), savings, travel, life insurance, renter’s insurance, telephone service, school supplies, books, movies, cable TV, Internet access, any food outside the home, any alcohol, bank fees, birthday or holiday presents, savings for a college education, or tithing.

The anti-living-wage forces were no doubt cynical even about last week’s non-binding Council resolution, which really amounts to little more than a collective Council grovel imploring the mayor to pay Metro workers a wage that is 90 cents below the paltry living standard detailed here.

Purcell pledges that his budget and its pay plan will look after Metro’s lowest-wage workers. But to live up to that promise, he has to reconcile his presumably good intentions with a flawed compensation study that puts low-wage workers at a disadvantage. More importantly, Purcell should forthrightly renounce the politics of market-driven poverty promulgated by the city’s corporate class. They may cheerfully finance his re-election campaign two years from now, but the votes required to win are another thing entirely.