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The Economic Impact of Living Wage Ordinances

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  • Mark D. Brenner

Abstract

Drawing 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.

Suggested Citation

  • Mark D. Brenner, 2004. "The Economic Impact of Living Wage Ordinances," Working Papers wp80, Political Economy Research Institute, University of Massachusetts at Amherst.
    • Handle: RePEc:uma:periwp:wp80
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    2. James Buss & Arthur Romeo, 2006. "The changing employment situation in some cities with living wage ordinances," Review of Social Economy, Taylor & Francis Journals, vol. 64(3), pages 349-367.
    3. Zenia Kotval & Zeenat Kotval-K & Patricia Machemer & John Mullin, 2012. "A living wage standard: A case study of the US Virgin Islands," Local Economy, London South Bank University, vol. 27(5-6), pages 541-557, August.
    4. Levin-Waldman, Oren M., 2008. "Characteristics of cities that pass living wage ordinances: Are certain conditions more conducive than others?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(6), pages 2201-2213, December.

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