The living wage law will affect about 3,100 workers, such as health and child care workers, parking attendants, landscapers, food service workers and others who provide services to the county. It takes effect on July 1, 2003.

A broad coalition of living wage supporters, who have endured an often bitter three-year effort to secure the bill's passage, hailed the measure as a crucial victory for a growing number of low-income families who are struggling to live in the state's wealthiest and most populous jurisdiction.

A family of four living in Montgomery County must earn roughly $56,000 a year to make ends meet, according to Progressive Maryland, an advocacy group. However, more than one-fifth of all county households earn less than $35,000 a year, up from about 18 percent a decade ago, according to the 2000 U.S. Census.

Full-time workers earning the federal minimum wage of $5.15 an hour earn about $11,000 a year, a salary that would more than double under Montgomery's living wage law.

"This takes 3,100 families out of poverty and puts them into the middle class," said Tom Hucker, Progressive Maryland's executive director.

Immigrant families drawn to the Washington, D.C., region's burgeoning service sector have found it difficult to find housing and maintain the area's high cost of living, said Councilman Philip M. Andrews (D-Dist. 3) of Gaithersburg, the bill's chief sponsor.

The wage bill will lead to better services and less turnover in lower-paying jobs, Andrews said.

"Everyone benefits from workers who make a living wage," he said. "We want to make sure that people working on county dollars are able to make a living wage in this county."

Tom Israel, executive director of the county's influential teachers union, said higher wages will allow parents to work less and spend more time with their children after school. "No one can argue about the impact of poverty on student achievement," he said.

Contracts under $50,000 per year, businesses with fewer than 10 employees, government agencies and public utility contracts are exempt from the bill.

In addition, the proposal exempts nonprofit organizations and businesses that receive certain tax credits or economic development aid. Those two groups, which were included under living wage legislation introduced in 1999, formed an unusual but powerful alliance to defeat the earlier version of the bill.

The bill approved Tuesday includes a "nonpenalty" provision meant to protect nonprofit organizations whose county contracts are more expensive because they voluntarily pay their workers more than the minimum wage.

Also included is a measure that allows contractors to substitute health insurance coverage as an alternative to paying the full $10.50 an hour.

County Executive Douglas M. Duncan (D), who opposed the 1999 bill in favor of approving the nation's first local earned income tax credit, pledged to sign the new wage bill.

"Passage of the living wage bill is an important step forward in our efforts to help the working poor in Montgomery County," he said in a prepared statement. He praised the council, saying that the bill "will significantly raise the quality of life for many hard-working residents who are having trouble making ends meet."

The council approved the legislation in a 7-1 vote. The council chamber in Rockville was crammed with media and with living wage supporters, who cheered loudly as the bill was approved. Councilman Isiah Leggett (D-At large) of Burtonsville was absent for the vote because of a prior commitment.

Councilwoman Nancy H. Dacek (R-Dist. 2) of Darnestown, the lone vote against the bill, called the law a "politically correct gesture" that is "economically flawed" and predicted it would do little to stem poverty.

The bill will cost the county more than $4 million annually.

"This is a program the government will pay for," Dacek said.

Some business leaders have argued that the bill would lead to layoffs among contractors.

But council President Steven A. Silverman (D-At large) of Silver Spring praised the compromise among businesses, nonprofit organizations and living wage advocates. "Compromise is not a dirty word," he said.

Montgomery joins two jurisdictions in the region -- Baltimore city ($7.70 an hour) and Alexandria, Va. ($10.21 an hour) -- that already have wage laws on the books. Maryland lawmakers also are considering a statewide living wage, though it is unclear how much support that measure has.

About 80 jurisdictions nationwide have enacted living wage laws.

Voters in New Orleans recently approved an unprecedented measure mandating that nearly all private businesses citywide pay their workers at least $1 more than the federal minimum wage. Two years ago, lawmakers in Suffolk County, N.Y. -- a jurisdiction similar to Montgomery in demographics and average household wealth -- approved a bill modeled after Montgomery's 1999 proposal.