The Economic Impact of Living Wage Ordinances
AbstractDrawing upon both prospective and retrospective evidence, this paper reviews the economic effects of local living wage ordinances. I concentrate my attention on the higher costs these measures create for covered firms, as well as their budgetary implications vis-à-vis cities that adopt them. I also briefly review the effect that living wage laws have had on bidding environment for city service contracts. Based on a range of cost estimates associated with living wage laws, I then examine the adjustment channels firms are likely to pursue when adjusting to higher labor costs, including: raising prices; increasing firm productivity; redistributing income within the firm; laying off employees; and relocating out of the area covered by the living wage mandate.
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Bibliographic InfoPaper provided by Political Economy Research Institute, University of Massachusetts at Amherst in its series Working Papers with number wp80.
Date of creation: 2004
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-06-14 (All new papers)
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