Evaluating Living Wage Laws in the United States: Good Intentions and Economic Reality in Conflict?

PERI Working Paper No. 61

43 Pages Posted: 9 Oct 2003

See all articles by Robert Pollin

Robert Pollin

University of Massachusetts at Amherst - College of Social and Behavioral Sciences - Department of Economics

Date Written: June 2003

Abstract

This paper first examines the question "what is a living wage" and provides a range of specific dollar amounts derived from a conceptual assessment of the term. I then provide a series of cost estimates of living wage laws in various cities. Based on these cost estimates, I examine a set of alternative adjustments that covered firms could make to absorb these costs, including raising prices and productivity, redistributing the firm's income more equally, laying off employees and relocating out of the area covered by the law. I draw upon both prospective and retrospective evidence to reach an overall assessment of the benefits of living wage laws relative to their costs.

Keywords: living wage, labor markets, unintended consequences

JEL Classification: J38

Suggested Citation

Pollin, Robert, Evaluating Living Wage Laws in the United States: Good Intentions and Economic Reality in Conflict? (June 2003). PERI Working Paper No. 61, Available at SSRN: https://ssrn.com/abstract=427685 or http://dx.doi.org/10.2139/ssrn.427685

Robert Pollin (Contact Author)

University of Massachusetts at Amherst - College of Social and Behavioral Sciences - Department of Economics ( email )

940 Thompson Hall
Amherst, MA 01003
United States
413-577-0126 (Phone)

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