Living wage policies have been established in cities, counties, school districts, states and other public agencies throughout the country to lift workers out of poverty. Most living wage laws set minimum wage and benefit standards for public contracts, subsidies and leaseholders on public land. Several are based upon a geographic zone. Today there are over 150 such laws in place.
Cry Wolf Quotes
A poorly crafted ‘living wage’ plan could achieve the opposite of its well-intentioned social goals. It could result in fewer good-paying jobs in the city, and less opportunity at the entry level. It could drive up the cost of city programs, leaving fewer resources to help lower-income families.
The bottom line remains that employers will have little motivation to hire low-skilled workers—those whose inexperience and lack of productivity does not warrant a wage meeting or exceeding the proposed living wage amount. These workers, who most desperately need experience, will be the ones left most vulnerable. Instead of being able to establish a foothold in the job market, they will have to rely on other means to provide for themselves—most often state-assisted.
Unfortunately, living wage laws may have an unintended consequence of causing low-wage workers to be replaced by higher skilled, more educated workers. Living wage ordinances hit hardest at new entrants to the labor force.
This initiative will kill jobs in the city. It also undoes much of the progress of the past five years in making Detroit a friendlier place for business.
Related Laws and Rules
The Economic Impact of Local Living Wages
The Economic Policy Institute finds that the costs of living wage ordinances are often overestimated.
Examining the Evidence: The Impact of the Los Angeles Living Wage Ordinance on Workers and Employers
Los Angeles Alliance for a New Economy: The LA living wage ordinance brought a pay raise to 10,000 workers, most of whom were poor.
Backgrounders & Briefs
Political Economy Research Institute is a think tank focused on a variety of subjects such as diverse financial regulation, living wages and environmental protection.
University of California-Berkeley Labor Center carries out research on labor and workplace-related issues.
The National Employment Law Project is an organization that promotes economically just public policy in the face of the prevailing trends of the law several decades.