Category Archives: Minimum Wage

Living Wage Ordinances in the Public Sector

Source: C.W. Von Bergen, William T. Mawer and Barlow Soper, Public Personnel Management, Vol. 36 no. 3, Fall 2007
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During the last decade more than 100 governmental units (primarily cities) have implemented living wage ordinances. These regulations require private sector employers who receive public funds through subsidies and contracts to pay their workforces a wage based on “need” rather than “skill.” Such ordinances feature a minimum wage floor that is higher–often much higher–than the traditional minimum wages set by state and federal legislation. This paper provides a history of the living wage movement and presents its benefits and challenges to assist local authorities in decision-making regarding this controversial and politicized issue.

The Economic Effects of a Citywide Minimum Wage

Source: Arindrajit Dube, Suresh Naidu, and Michael Reich, Industrial and Labor Relations Review, July 2007
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This paper presents the first study of the economic effects of a citywide minimum wage—San Francisco’s adoption of an indexed minimum wage, set at $8.50 in 2004 and $9.14 by 2007. Compared to earlier benchmark studies by Card and Krueger and by Neumark and Wascher, this study surveys table-service as well as fast-food restaurants, includes more control groups, and collects data for more outcomes. The authors find that the policy increased worker pay and compressed wage inequality, but did not create any detectable employment loss among affected restaurants. The authors also find smaller amounts of measurement error than characterized the earlier studies, and so they can reject previous negative employment estimates with greater confidence. Fast-food and table-service restaurants responded differently to the policy, with a small price increase and substantial increases in job tenure and in the proportion of full-time workers among fast-food restaurants, but not among table-service restaurants.

Make It Real: Bringing the New Minimum Wage Home

Source: Beth Shulman, National Employment Law Project Board Chair and Catherine Ruckelshaus, Litigation Director, National Employment Law Project, July 24, 2007

Today, the nation’s low-wage workers will start to get the raise the country voted to give them as the federal minimum wage hike goes into effect. The pay floor will rise from $5.15 per hour to $5.85, and then to $7.25 in two years.

But will it really happen?

The hike sounds good on paper, and we might assume the new law will put more money into the pockets of the workers who need it most. Unfortunately, it’s not that simple. First we need to make sure employers obey the law, since a. lot of low-road employers flouted the minimum wage law even at $5.15.

The Minimum Wage is a Middle-Class Issue

Source: Oren Levin-Waldman and Charles Whalen, Challenge: The Magazine of Economic Affairs, Volume 50, Number 3, May-June 2007
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If raising the minimum wage affected only 2.5 percent of the labor market, as many argue it does, than it would not be such an explosive political issue. In truth, it affects wages well up the income ladder. The authors show why. They argue that a higher minimum wage is an essential part of any American wage policy.