Thinking About Local Living Wage Requirements

Upjohn Institute Working Paper No. 02-76

38 Pages Posted: 18 Mar 2002

See all articles by Timothy Bartik

Timothy Bartik

W.E. Upjohn Institute for Employment Research

Date Written: March 2002


This paper reviews what we currently know about the benefits and costs of different varieties of a "living wage": a local government requirement, now adopted by over 50 local governments, for wages above the federal minimum imposed on employers with some financial link to the local government.

The review includes economic theory, empirical research on local labor markets, and empirical research on the living wage. The paper concludes that moderate living wage requirements applied to the local government's own employees, and contractors' and grantees' employees who are funded by the local government, may do more good than harm. Excessive living wages or living wages applied to non-city funded workers are more likely to have negative side-effects.

The merits of living wages applied to economic development assistance depend on the local economy's strength and whether this assistance program is used by the city's competitors. In a weak local economy, living wages applied to commonly-used economic development programs may reduce the city's economic growth.

Keywords: living wage, cities, local economic development, Bartik, Upjohn Institute

JEL Classification: J38, J45, J23, R23, R58, H72

Suggested Citation

Bartik, Timothy, Thinking About Local Living Wage Requirements (March 2002). Upjohn Institute Working Paper No. 02-76, Available at SSRN: or

Timothy Bartik (Contact Author)

W.E. Upjohn Institute for Employment Research ( email )

300 South Westnedge Avenue
Kalamazoo, MI 49007-4686
United States

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