Currently, Utah's capital is the only municipality that allows living-wage incentives to be considered when companies vie for city contracts. On Friday, Sen. Howard Stephenson, R-Draper, succeeded in advancing a bill that denies cities the ability to impose their own wage limits.

"What Salt Lake City is attempting to achieve is an isolated incident, but it could allow for a crazy quilt of policies that are impossible for employers to track," Stephenson told the Senate Revenue and Taxation Committee.

Labor groups and city officials criticized the bill, saying it caters too closely to business interests.

One union official, representing steelworkers, had sharp words for Stephenson.

"All you people care about is making a profit," he shouted before committee leaders cut him off.

The idea of using living wages as an incentive to employers that "tinkers with the marketplace is ludicrous," said George Neckel, another labor representative with the lobbyist group Jobs with Justice.

"If businesses are relying on minimum-wage standards, it means they couldn't survive in a true free marketplace" he added.

Salt Lake City adopted a value-based procurement policy in 2004 with the idea that it would save tax dollars, said City Attorney Ed Ruttan. He noted that wage incentives come into play only when the lowest bids for city contracts are within $20,000 of each other.

"This kind of [state] regulation discourages creative thinking on the part of city administrators to figure out ways of getting the best value out of the tax dollars with which we are entrusted," Ruttan said. "The lowest bids are not always the best for the city. This is another tool the city can use to get the most for their money."

Ruttan cited research that showed higher wages lead to improved productivity and lower turnover, which save cities money in training costs.

Though Salt Lake City's policy is limited to government contracts, critics say it sets a bad precedent.

"How far will local governments go in wage setting?" asked Melva Sine, president of the Utah Restaurant Association. "In our industry, minimum wage is considered a first step, not a final destination, and we are helping to pay for training our society's work force."

The bill moves to the Senate floor for debate.