PPIC Logo Independent, objective, nonpartisan research
Report · March 2002

How Living Wage Laws Affect Low-Wage Workers and Low-Income Families

David Neumark

Since 1994, nearly 40 cities in the United States have passed living wage ordinances. These ordinances mandate that businesses under contract with the city, and in some cases businesses receiving assistance from the city, pay employees a wage sufficient to lift their families out of poverty. This report examines the actual experiences of cities implementing such laws, focusing in particular on the following questions:

  • Do living wage laws raise wages for at least some low-wage workers? Are wage gains for low-wage workers offset by either reductions in employment or the amount of hours worked as employers seek to accommodate the additional labor costs?
  • Do living wage laws achieve their stated policy objective of improving economic outcomes for low-income families? Do the laws reduce urban poverty?
  • Given the stated antipoverty goal of living wage campaigns, why do the laws generally restrict coverage to city contractors, rather than imposing wage floors for broad groups of workers?


Economic Mobility Economic Trends Economy Health & Safety Net Jobs and Employment