Dive Brief:
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In her first proposed budget as Detroit mayor, Mary Sheffield earmarked $7.9 million to pay all full-time city employees a livable wage of at least $21.45 an hour. Sheffield’s office estimates this could affect 900 workers — 70% of whom are Detroit residents, according to Michigan Public Radio.
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Detroit is part of a wave of cities that have implemented livable wages and housing in recent years, said William Hatcher, a public administration professor at Augusta University in Georgia.
- “As there is more pressure on affordability with little action at the national level to address that public problem, there may be more livable wage initiatives among the states and local governments in the U.S.,” Hatcher told Smart Cities Dive.
Dive Insight:
Detroit’s average household income grew from $22,000 in 2014 to $39,000 in 2025, according to a City of Detroit press release. But Detroit’s poverty rate is still close to 35%, and the U.S. Census Bureau reported last year that the child poverty rate was more than 50%.
“Detroit can’t say it is taking poverty reduction seriously as long as it is not paying a significant number of its employees a livable wage,” Sheffield said in a statement. “This is an urgent priority.”
Hatcher said livable wages for municipal employees can promote community sustainability. When as many residents as possible earn a living wage, it creates more resources for schools, parks and other features that are attractive to future residents. And “having more residents able to afford basic necessities leads to businesses benefiting from having more stable customers,” he said.
But Hatcher also notes that cities may need to increase taxes to pay for employee livable wages, which could lead to an exodus of high income-earning residents.
According to Michigan Public Radio, Sheffield’s office said the money for the employee wage increase would come from the city’s non-departmental budget, which contains major revenues supporting the general fund that are not specific to any one department.
