NCPA - National Center for Policy Analysis

A SHORT-SIGHTED EFFORT TO HELP THE WORKING POOR

December 5, 2007

The claim that workers would benefit if retail businesses larger than 95,000 square feet within Spokane, Washington, city limits paid wages anywhere from 135 percent to 165 percent of the state minimum wage is ill-founded, says Carl Gipson, director of the Center for Small Business at the Washington Policy Center.

According to Gibson:

  • Most of the benefits of a living wage would go towards households that are not below the federal poverty line.
  • Living wage ordinances force the least skilled workers out of the labor market.
  • Economic evidence from other states shows there would be a net job loss within Spokane's retail workforce.
  • Basing wages upon an employee's need could drastically escalate labor costs.

"The idea of a 'living wage' is not a new idea, but our research shows it is a bad idea," said Carl Gipson, study author and director for small business at Washington Policy Center.  "Proponents are attempting to impose price controls on labor in an effort to alleviate poverty.  It is a noble idea but one that is proven not to work. In fact, price controls will hurt those the regulation is intended to help."

Source: "Mandated Living Wages: A Short-Sighted Effort to Help the Working Poor," Washington Policy Center, December 3, 2007.

 

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