NCPA - National Center for Policy Analysis

Living Wage Regulations

June 21, 2000

Advocates of the so-called living wage want low-income workers to earn enough to avoid the poverty threshold -- now defined as $17,000 a year for a family of four. The federal minimum wage now stands at $5.15 an hour. If the concept of the living wage is adopted, the amount would jump to $8.20 an hour -- and even higher in large metropolitan areas.

  • At present, 43 cities and counties impose living-wage requirements on companies with which they do business or otherwise assist.
  • The Employment Policies Institute reports that living-wage campaigns are underway in 88 cities.

Critics point out that with living-wage policies being applied in some locales and not in others, economic dislocations and disruptions will begin to occur between participating and non-participating jurisdictions.

Obviously, a living wage mandate raises the cost of doing business -- but it also decreases job opportunities for low-skilled workers, say economists.

Source: W. Michael Cox (Federal Reserve Bank of Dallas), "A Growing Cancer: 'Living Wage' Sure to Cause Economic Death," Investor's Business Daily, June 19, 2000.

 

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