Report: Living wage all the rage?

by Brian McKim & Traci Skene on July 13th, 2005

Late last month, The Public Policy Institute of California, published a 23-page report on living wage laws and their effects on the local citizenry. The rest of the media has apparently digested it and is regurgitating favorite parts. Among them:

…urban areas see a 2 percent decline in poverty rates a year after enacting living wage laws.

But the study also found that a 50 percent increase in the living wage reduced employment by 6 percent among the least-skilled workers. That’s because the mandated wage increase acts like a tax on the use of low-skilled workers, discouraging employers from hiring them, the report said.

“You’re going to help some people, but exacerbate the problem for others,” said David Neumark, a senior fellow at the PPIC who co-wrote the study with Scott Adams, a University of Wisconsin economics professor. “Urban poverty falls, but there are some people who lose, and those who lose are in some sense the least well-off.”

There hasn’t been much rumbling about a living wage for comics in New York City. Last we heard, they squeezed the owners and got a minor bump in pay from them. We were relieved to hear that they hadn’t gone through with any of their more severe plans. We argued against a living wage for comics in New York City… anywhere, really. And, if you substitute the words “least-skilled workers” with “open mikers,” you can see how living wage talk might make (or should make!) comics a little bit nervous. When we heard a report on the study, we felt a certain measure of vindication, as the report echoed precisely one of the more dire scenarios we outlined. Sure, a certain number of workers (experienced comics) benefit by making more money… but the jiggering of the wage sorta kinda makes a goodly number of the least-skilled workers… disappear.

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