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

By 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?

Report

Increasing the Minimum Wage: California’s Winners and Losers

By Thomas E. MaCurdy, Margaret O’Brien-Strain

As a policy tool, minimum wage increases rely heavily on two assumptions: that such increases help the poor and impose little public or social cost.  In Increasing the Minimum Wage: California’s Winners and Losers, Margaret O’Brien-Strain and Thomas MaCurdy test both assumptions by modeling the effects of the 1996 federal increase from $4.25 to $5.15 per hour.  Noting that low-income families receive a relatively small portion of the additional earnings and that higher labor costs put upward pressure on the prices of products these families buy, the authors conclude that minimum wage increases do not help poor families as much as more targeted policy options.

blog post

1 in 4 Child Care Workers in California Lives in Poverty

By Tess Thorman, Caroline Danielson, Sarah Bohn

While demand for preschools and child care is high in California, the state's child care workers—particularly women of color—are poorly paid and almost twice as likely to live in poverty than workers overall.

blog post

Is College the Answer to Income Inequality?

By Hans Johnson, Marisol Cuellar Mejia

Educational attainment is by far the single most important determinant of an individual’s income. A key question, then, is whether improvements in educational outcomes can reduce inequality.

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