Mises Wire

How to Kill the Living Wage

How to Kill the Living Wage

No link for this working paper but you can write the lead author for a copy: sjadams@uwm.edu

“The Effects of Living Wage Laws: Evidence from Failed and Derailed Living Wage Campaigns”

SCOTT J. ADAMS and DAVID NEUMARK

Living wage campaigns have succeeded in about 100 jurisdictions in the United States. But living wage campaigns have also been unsuccessful in numerous cities. Some campaigns were derailed due to a state legislative or judicial decision preventing living wages. Other campaigns failed to get legislation passed at the city level due to a negative city council vote or a mayoral veto.

The analysis in this paper exploits the information provided by failed and derailed living wage campaigns in estimating effects of living wage laws. These unsuccessful living wage campaigns provide a better control group or counterfactual for estimating the effects of living wage laws than the broader set of all cities without a living wage law, and also permit the separate estimation of the effects of living wage laws and living wage campaigns.

The findings indicate that living wage laws raise wages of low-wage workers but also reduce employment among the least-skilled, especially broader living wage laws that cover business assistance recipients, and living wage laws accompanied by similar laws in nearby cities.

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