Do Living Wage Ordinances Reduce Urban Poverty?

Abstract

Living wage ordinances typically mandate that businesses under contract with a city or, in some cases, receiving assistance from a city, must pay their workers a wage sufficient to support a family financially. We estimate the effects of these ordinances on wages, hours, and employment in cities that have adopted such legislation. We then examine the effects of these laws on poverty. Our findings indicate that living wage ordinances boost wages of low-wage workers. Moreover, we find a moderate negative employment effect. Finally, some of the evidence suggests that living wages achieve modest reductions in urban poverty.