NCPA - National Center for Policy Analysis

Living Wage Movement Spreads

August 2, 2001

Living wage ordinances provide questionable benefits to low-wage workers, according to a new study by the Employment Policy Foundation. These ordinances create disincentives for employees to improve their education and skills and adversely affect nonprofit organizations.

  • There are sixty-two living wage ordinances in cities, counties and school districts in 24 states.
  • The average wage under such laws is $9.66 per hour -- nearly double the federal minimum wage.
  • With 75 campaigns currently underway to pass living wage ordinances in 37 states, the movement is gaining momentum, with an ordinance being adopted virtually every month.

The living wage movement is the creation of the grass-roots activist group Association of Community Organizations for Reform Now (ACORN), which has 100,000 members in 40 cities nationwide. The estimated $6 million per year in revenue from memberships is supplemented by additional support from labor unions and foundations.

The EPF also examined the characteristics of low-wage workers, which living wage ordinances supposedly help.

  • Employees who earn between $5.15 and $7.15 an hour are overwhelmingly young and most do not live in poor households.
  • One half of workers who earn $286 or less a week live in households with annual incomes of more than $42,000.
  • Only 27 percent live in households that earn less than $25,000 per year.
  • More than 42 percent are children or other relatives of a head of household.

The living wage movement would like to raise the federal minimum wage far beyond recent proposals to raise it to $6.65 per hour by 2003.

Source: "The Living Wage Movement," Issue Backgrounder, July 25, 2001, Employment Policy Foundation, 1015 Fifteenth Street, N.W., Suite 1200, Washington, D.C. 20005, (202) 789-8685.


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